<PAGE>
As filed with the Securities and Exchange Commission on June 9, 1999
Securities Act File No. 333-70423
Investment Company Act of 1940 File No. 811-09195
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. 1 / X /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 1 / X /
SA Funds - Investment Trust
(Formerly Known as RWB Funds - Investment Trust)
(Exact Name of Registrant as Specified in Charter)
1190 Saratoga Avenue, Suite 200
San Jose, California 95129
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number (408) 260-3143
Cynthia Surprise
Vice President and Associate Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
(Name and Address of Agent for Service)
Copies to:
Julie Allecta, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, CA 94104-2635
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after this
Registration Statement is declared effective.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 9(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Items in Part A of Form N-1A Heading
---------------------------- -------
<S> <C>
1. Front and Back Cover Pages Cover
2. Risk/Return Summary: Investments, Risk/Return Summary-goal, Principal
Risks, and Performance Investment Strategies, Principal Risks
3. Risk/Return Summary: Fee Table Risk/Return Summary- Fees and Expenses
4. Investment Objectives; Principal More About SA Funds
Investment Strategies, and Related
Risks
5. Management's Discussion of Fund Not Applicable
Performance
6. Management, Organization, and Management
Capital Structure
7. Shareholder Information Your Account
8. Distribution Arrangements Your Account
9. Financial Highlights Information Not Applicable
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) (CONTINUED)
<CAPTION>
Items in Part B of Form N-1A Heading
---------------------------- -------
<S> <C>
10. Cover Page and Table of Contents Cover and Table of Contents
11. Fund History History and General Information
12. Description of the Fund and Its Description of the Funds and Their
Investments and Risks Investments and Risks
13. Management of the Fund Management of the Trust
14. Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Securities
15. Investment Advisory and Other Investment Advisory and Other
Services Services
16. Brokerage Allocation and Other Brokerage Allocation and Other
Practices Services
17. Capital Stock and Other Securities Information Concerning Shares
18. Purchase, Redemption and Pricing of Purchase, Redemption and Pricing of
Shares Shares
19. Taxation of the Fund Taxes
20. Underwriters Investment Advisery and Other
Services-Distribution
21. Calculation of Performance Data Performance Information
22. Financial Statements Financial Statements
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) (CONTINUED)
<CAPTION>
Items in Part C of Form N-1A Heading
---------------------------- -------
<S> <C>
23. Exhibits Exhibits
24. Persons Controlled by or Under Common Persons Controlled by or Under
Control with Registrant Common Control with Registrant
25. Indemnification Indemnification
26. Business and Other Connections of the Business and Other Connections of
Investment Advisor the Investment Advisor
27. Principal Underwriters Principal Underwriters
28. Location of Accounts and Records Location of Accounts and Records
29. Management Services Management Services
30. Undertakings Undertakings
</TABLE>
<PAGE>
SA FUNDS
PROSPECTUS
- SA FIXED INCOME FUND
- SA U.S. MARKET FUND
- SA U.S. HBtM FUND
- SA U.S. SMALL FUND
- SA INTERNATIONAL HBtM FUND
- SA INTERNATIONAL SMALL FUND
As with all mutual funds, the
Securities and Exchange Commission
has not approved or disapproved
these securities nor passed upon
the accuracy or adequacy of this
prospectus. It is a criminal
offense to state otherwise.
June [ ], 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
3 RISK/RETURN SUMMARY
3 SA FIXED INCOME FUND
3 GOAL
3 PRINCIPAL INVESTMENT STRATEGIES
3 PRINCIPAL RISKS
5 FEES AND EXPENSES
5 PERFORMANCE
6 SA EQUITY FUNDS
6 INVESTMENT APPROACH
6 GOALS
6 PRINCIPAL INVESTMENT STRATEGIES
7 PRINCIPAL RISKS
9 FEES AND EXPENSES
9 PERFORMANCE
11 MANAGEMENT
12 YOUR ACCOUNT
14 PRICING OF FUND SHARES
16 DISTRIBUTIONS
17 FEDERAL TAX CONSIDERATIONS
MORE ABOUT SA FUNDS
18 FIXED INCOME FUND
19 EQUITY FUNDS
</TABLE>
BACK COVER FOR ADDITIONAL INFORMATION
<PAGE>
RISK/RETURN SUMMARY
- --------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the principal investment strategies
of each of the SA Funds and the principal risks of investing in the Funds. For
further information on the Funds' investments, strategies and risks, please read
the section entitled More About SA Funds.
SA FIXED INCOME FUND
GOAL
The Fund's goal is to maximize total return available from a universe of high
quality fixed income investments maturing in five years or less.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing in a variety of high quality
debt securities maturing in five years or less. These may include:
- - obligations issued or guaranteed by the U.S. or foreign governments or
their agencies and instrumentalities;
- - corporate debt obligations;
- - bank obligations;
- - commercial paper;
- - repurchase agreements;
- - obligations of supranational organizations (such as the World Bank); and
- - Eurodollar obligations.
The Fund may use foreign forward currency contracts to hedge foreign currency
risks. The Fund may also engage in short-term trading, enter into futures and
options contracts and lend portfolio securities, which are described under More
About SA Funds.
PRINCIPAL RISKS
The share price of the Fund and the Fund's yield will change daily because of
changes in interest rates and other market conditions and factors. You may lose
money if you invest in the Fund. There are other circumstances that could
adversely affect your investment, which may not be described here, that could
prevent the Fund from achieving its goal.
The principal risks of investing in the Fixed Income Fund are:
- - INTEREST RATE RISK: In general, bond prices rise when interest rates fall
and fall when interest rates rise. Longer term bonds are generally more
sensitive to interest rate changes than shorter term bonds. Generally, the
longer the average maturity of the bonds held by the Fund, the more the
Fund's share price will fluctuate in response to interest rate changes.
- - CREDIT (or DEFAULT) RISK: It is possible that some of the issuers will not
make payments on debt securities held by the Fund, or there could be
defaults on repurchase agreements held by the Fund. Also, an issuer may
suffer adverse changes in financial condition that could lower the credit
quality of a security, leading to greater volatility in the price of the
security and in shares of the Fund. A change in the quality rating of a
bond can affect the bond's liquidity and make it more difficult for the
Fund to sell.
- - FOREIGN SECURITIES and CURRENCIES RISK: Investments by the Fund in foreign
securities involve risks in addition to those of U.S. securities. Foreign
securities are generally more volatile and less liquid than U.S.
securities, in part because of greater political and economic risks and
because there is less public information available about foreign companies.
Also, a decline in the value of foreign currencies relative to the U.S.
dollar will reduce the value of securities denominated in those currencies.
The Fund may be adversely affected by the conversion of certain European
currencies into the Euro. This conversion, which is under way, is scheduled to
be completed in 2002. However, problems with the conversion process and delays
could increase volatility in world capital markets and affect European capital
markets in particular.
2
<PAGE>
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy
and hold shares of the Fixed Income Fund. The Fund has no sales charge (load),
redemption fees or exchange fees, although some institutions may charge you a
fee for shares you buy through them. Shareholder fees are paid directly from
your investment. Annual fund operating expenses are paid from Fund assets.
SHAREHOLDER FEES
Annual Account Maintenance Fee (for accounts under $100,000) (1) $100.00
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
AS A % OF NET ASSETS
<S> <C> <C>
CLASS S CLASS I
------- -------
Management Fee .85% .85%
Sub-Advisory Fee .19% .19%
Shareholder Servicing Fee .25% .05%
Other Expenses (2) .82% .76%
---- ----
Total Operating Expenses 2.11% 1.85%
Fee Waiver and/or Expense (.85)% (.85)%
------ ------
Reimbursement
Net Expenses (3) 1.26% 1.00%
</TABLE>
(1) SA Funds may deduct an annual maintenance fee of $100.00 from accounts with
a value of less than $100,000. The account value is determined by
aggregating accounts with SA Funds. The Fund expects to value accounts on
[the second Friday in November of each year]. Accounts opened after
[September 30] will not be subject to the fee for that year. The fee is
payable to the Fund and is designed to offset in part the relatively higher
costs of servicing smaller accounts. The Fund reserves the right to waive
the fee.
(2) Other Expenses are based on estimated amounts for the current fiscal year.
(3) The manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit the Fund's total
operating expenses as shown above during the Fund's first ten years of
operations. The manager may elect to recapture any amounts waived or
reimbursed subject to the following conditions: (1) the manager must
request reimbursement within three years from the year in which the
waiver/reimbursement is made, (2) the Board of Trustees must approve the
reimbursement and (3) the Fund must be able to make the reimbursement and
still stay within the operating expense limitation.
EXAMPLE
This example is intended to help you compare the cost of investing in the
Fixed Income Fund to the cost of investing in other mutual funds. The example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then sell all of your shares at the end of those periods. The example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same as shown in the table above. Although your
actual costs and the return on your investment may be higher or lower, based on
these assumptions your costs would be:
<TABLE>
<CAPTION>
YEAR CLASS S CLASS I
---- ------- -------
<S> <C> <C>
1 $129 $102
3 $402 $319
</TABLE>
3
<PAGE>
PERFORMANCE
The Fund had not commenced operations as of the date of this Prospectus
and, therefore, has no performance information to report.
4
<PAGE>
SA EQUITY FUNDS
SA U.S. MARKET FUND
SA U.S. HBTM FUND
SA U.S. SMALL FUND
SA INTERNATIONAL HBTM FUND
SA INTERNATIONAL SMALL FUND
- --------------------------------------------------------------------------------
EQUITY INVESTMENT APPROACH
- - The sub-adviser believes that equity investing should involve a long-term
view and a focus on asset class (e.g., small company stocks) selection.
Accordingly, the sub-adviser does not engage in market-timing or
conventional stock selection.
- - Using quantitative programs, the sub-adviser generally structures a Fund's
portfolio by:
- Selecting a starting universe of securities
(for example, all publicly traded U.S. common stocks).
- Creating a sub-set of companies meeting the sub-adviser's investment
guidelines.
- Excluding certain companies after analyzing various factors (for
example, solvency).
- Purchasing stocks so the portfolio is generally market capitalization
weighted, which means that stocks representing larger companies will
represent a proportionately larger percentage of the portfolio.
- --------------------------------------------------------------------------------
SA U.S. MARKET FUND
GOAL
The Fund's goal is to achieve long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing in common stocks of U.S.
companies within a MARKET CAPITALIZATION RANGE of deciles 1-10.
Using a technique known as "sampling", the sub-adviser will select stocks that
will recreate in terms of industry, size and other characteristics (such as
projected earnings, financial strength and debt) the Fund's target universe of
all common stocks that are traded on the New York Stock Exchange, the American
Stock Exchange and the NASDAQ National Market System.
The Fund will also invest up to 5% of its total assets in the U.S. 9-10 Small
Company Portfolio, an investment company advised by Dimensional Fund Advisors
Inc. ("DFA"), the sub-adviser of the Fund.
SA U.S. HBTM FUND
GOAL
The Fund's goal is to provide long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing at least 80% of its total
assets in common stocks of U.S. companies that the Fund believes are value
stocks. The Fund considers value stocks to be those of companies with high book
values in relation to their market values. In measuring value, factors such as
cash flow, economic conditions and developments in the issuer's industry are
also considered.
The Fund considers a company to have a high book to market ratio if its ratio
equals or exceeds the highest 30% of companies listed on the New York Stock
Exchange.
The Fund intends to invest in common stocks within a market capitalization range
of deciles 1-5.
- --------------------------------------------------------------------------------
ABOUT MARKET CAPITALIZATION RANGES:
Market Capitalization is the total value of a company's stock in the marketplace
or on a stock exchange. For example, a company that has issued one million
shares that are selling for $30 per share would have a market capitalization of
$30,000,000. Market capitalization ranges for the Funds are determined as
follows:
1. The sub-adviser equally divides all the companies traded on the New York
Stock Exchange into 10 groups or "deciles" based on market capitalization.
Stocks in decile 1 have the biggest market capitalizations and those in
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
decile 10, the smallest.
2. The sub-adviser then combines two or more of these deciles into a market
capitalization segment or range.
3. The sub-adviser generally considers a stock (it may not necessarily be
traded on the New York Stock Exchange) for purchase only if its market
capitalization falls within the ranges created.
- --------------------------------------------------------------------------------
The Fund may use a variety of TAX-EFFICIENT MANAGEMENT TECHNIQUES, when
consistent with its strategies and operational needs, to minimize adverse tax
consequences to shareholders of the Fund.
- --------------------------------------------------------------------------------
ABOUT TAX-EFFICIENT MANAGEMENT TECHNIQUES
The sub-adviser may use the following tax-efficient management techniques to
minimize taxable distributions, particularly short-term capital gains and
current income, which are taxed at a higher rate than long-term capital gains.
- - Minimizing sales of securities that result in capital gains.
- - Maximizing the extent to which any realized net capital gains are long-term
in nature (taxable at lower capital gains tax rates).
- - Minimizing dividend income.
- - Realizing losses to offset gains, when prudent to do so.
- --------------------------------------------------------------------------------
SA U.S. SMALL FUND
GOAL
The Fund's goal is to provide long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing at least 80% of its total
assets in equity securities of U.S. companies with market capitalizations within
the smaller half of companies listed on the New York Stock Exchange.
The Fund may use a variety of TAX-EFFICIENT MANAGEMENT TECHNIQUES to minimize
adverse tax consequences to shareholders of the Fund.
SA INTERNATIONAL HBTM FUND
GOAL
The Fund's goal is to provide long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing primarily in common stocks of
large non-U.S. companies that it believes are value stocks. The Fund considers
value stocks to be those of companies with high book values in relation to their
market values. In measuring value, factors such as cash flow, economic
conditions and developments in the issuer's industry are also considered.
The Fund considers a book to market ratio to be high if it is within the highest
30% of exchange-listed companies in the applicable country.
The Fund intends to invest in companies in countries with developed markets. At
least 65% of the Fund's assets will be invested in companies in at least three
non-U.S. countries.
Currently, the Fund expects to invest in companies with market capitalizations
of at least $800 million.
The Fund may use a variety of TAX-EFFICIENT MANAGEMENT TECHNIQUES to minimize
adverse tax consequences to shareholders of the Fund.
SA INTERNATIONAL SMALL FUND
GOAL
The Fund's goal is long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
The Fund is a fund of funds, which means that it invests almost all of its
assets in other mutual funds. The Fund intends to pursue its goal by investing
its assets in the following mutual funds ("underlying funds"): DFA Japanese
Small Company Series, DFA United Kingdom Small Company Series, DFA Continental
Small Company Series, DFA Pacific Rim Small Company Series and DFA Emerging
Markets Series.
6
<PAGE>
Each of the underlying funds is a series of The DFA Investment Trust Company, an
investment company advised by DFA, the sub-adviser of the International Small
Fund.
The Fund will invest its assets in the underlying funds within the following
ranges (expressed as a percentage of the Fund's assets):
<TABLE>
<CAPTION>
Underlying Fund Investment Range
--------------- ----------------
<S> <C>
Japanese Series 20% - 45%
U.K. Series 5% - 40%
Continental Series 20% - 45%
Pacific Rim Series 0% - 25%
Emerging Markets Series 0% - 25%
</TABLE>
The manager will determine periodically the allocations among underlying funds.
POLICIES OF ALL UNDERLYING FUNDS DFA structures each underlying fund by
generally basing the amount of each security purchased on the issuer's market
capitalization relative to other companies located in the same country (or
region, in the case of the Continental Series and Pacific Rim Series). DFA may
exclude the stock of an otherwise eligible company if DFA believes conditions
exist that make the purchase of that stock inappropriate.
Periodically, DFA will determine the market capitalization limit for eligible
portfolio securities and will adjust the composition of the Fund's portfolio to
eliminate stocks which are no longer eligible.
PRINCIPAL RISKS OF THE EQUITY FUNDS
The share price of each Equity Fund will change daily based on market conditions
and other factors. You may lose money if you invest in these Funds. There are
other circumstances, which are not described here, that could adversely affect
your investment, and that could prevent a Fund from achieving its goal.
RISKS THAT APPLY TO ALL EQUITY FUNDS:
- STOCK RISK: Stock prices may fluctuate widely in response to company,
market or economic news.
- COMPANY SIZE RISK: There are particular risks associated with
investing in companies of a given size.
- Larger, more established companies are generally not nimble and
may be unable to respond quickly to competitive challenges, such
as changes in technology and consumer tastes.
- The stocks of smaller companies may have more risks than those of
larger companies. They may be more susceptible to market
downturns and their prices may be more volatile.
RISKS THAT APPLY PRIMARILY TO THE U.S. HBTM FUND AND INTERNATIONAL HBTM
FUND:
- VALUE STOCKS RISK: Value Stocks may underperform when the market
strongly favors growth stocks over value stocks. In addition, a value
stock may not reach what the sub-adviser believes is its full market
value or its intrinsic value may go down.
RISKS THAT APPLY PRIMARILY TO THE INTERNATIONAL HBTM FUND AND INTERNATIONAL
SMALL FUND:
- FOREIGN SECURITIES AND CURRENCY RISKS: Investments in foreign
securities involve risks in addition to those of U.S. securities.
Foreign securities are generally more volatile and less liquid than
U.S. securities, in part because of higher political and economic
risks, less availability of public information about foreign companies
and fluctuations in currency exchange rates.
The Funds may be adversely affected by the conversion of certain
European currencies into the Euro. This conversion, which is under
way, is scheduled to be completed in 2002. However, problems with the
conversion process and delays could increase volatility in world
capital markets and affect European capital markets in particular.
7
<PAGE>
RISK THAT APPLY PRIMARILY TO THE INTERNATIONAL SMALL FUND:
- EMERGING MARKETS RISK: Numerous emerging countries have recently
experienced serious, and potentially continuing, economic and
political problems. Stock markets in many emerging countries are
relatively small, expensive and risky. Foreigners are often limited
in their ability to invest in, and withdraw assets from, these
markets. Additional restrictions may be imposed under emergency
conditions. Risks generally associated with foreign securities and
currencies also apply.
8
<PAGE>
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy
and hold shares of an Equity Fund. The Funds have no sales charge (load),
redemption fees or exchange fees, although some institutions may charge you a
fee for shares you buy through them. Shareholder fees are paid directly from
your investment. Annual fund operating expenses are paid from Fund assets.
SHAREHOLDER FEES
Transaction Fees (as a % of offering price) (1)
International Small Fund . . . . . . . . . . . . . . . . . . . . %
Annual Account Maintenance Fee (for accounts under $100,000) (2). . . $100.00
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(AS A % OF NET ASSETS)
U.S. MARKET FUND U.S. HBTM FUND U.S. SMALL FUND
CLASS S CLASS I CLASS S CLASS I CLASS S CLASS I
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Management Fee .85% .85% .85% .85% .85% .85%
Sub-Advisory Fee .05% .05% .27% .27% .38% .38%
Shareholder Servicing Fee .25% .05% .25% .05% .25% .05%
Other Expenses (3) 1.04% .98% 1.52% 1.46% 1.70% 1.64%
----- ---- ----- ----- ----- -----
Total Operating Expenses 2.19% 1.93% 2.89% 2.63% 3.18% 2.92%
Fee Waiver and/or Expense Reimbursement (.85)% (.85)% (1.50)% (1.50)% 1.64% (1.64%)
------ ------ ------- ------- ----- -------
Net Expenses (4) 1.34% 1.08% 1.39% 1.13% 1.54% 1.28%
<CAPTION>
INTERNATIONAL HBTM FUND INTERNATIONAL SMALL FUND
CLASS S CLASS I CLASS S CLASS I
Management Fee .85% .85% .85% .85%
Sub-Advisory Fee .38% .38% [ ]% [ ]%
Shareholder Servicing Fee .25% .05% .25% .05%
Other Expenses (3) 1.23% 1.17% 1.31% 1.25%
----- ----- ----- -----
Total Operating Expenses 2.71% 2.45% 2.41% 2.15%
Fee Waiver and/or Expense Reimbursement (.92%) (.92)% [ ]% [ ]%
----- ----- ----- -----
Net Expenses (4) 1.79% 1.53% 1.54% 1.28%
</TABLE>
- ---------------------------
* In addition to the expenses shown above, shareholders of the International
Small Fund will indirectly bear their pro rata share of fees and expenses of the
underlying funds. The total operating expenses (as a percentage of net assets)
for the underlying funds during their last fiscal year were .28% for the
Japanese Series, .26% for the U.K. Series, .27% for the Continental Series, .38%
for the Pacific Rim Series, and .53% for the Emerging Market Series.
(1) The International Small Fund charges a transaction fee on purchase of, and
exchanges for, shares of that Fund. The fee does not apply to reinvested
dividends or capital gain distributions. The fee is not a sales charge.
It is paid to the Fund and is used to protect existing shareholders by
offsetting the transaction costs associated with new purchases of
securities by the Fund. The transaction fee is blended rate, which is
based on the current target investment allocations among the underlying
funds. Consequently, the transaction fee will change from time to time if
the Fund changes the target investment allocation. An investor may call
the manager for the transaction fee rate at the time of investment.
(2) The Funds may deduct an annual maintenance fee of $100.00 from accounts
with a value of less than $100,000. The account value is determined by
aggregating accounts with SA Funds. The Funds expects to value accounts on
[the second Friday in November of each year]. Accounts opened after
[September 30] will not be subject to the fee for that year. The fee is
payable to the Funds and is designed to offset in part the relatively
higher costs of servicing smaller accounts. The Funds reserve the right to
waive the fee.
(3) Other Expenses are based on estimates for the current fiscal year.
(4) The manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit the Fund's total
operating expenses as shown above during the Fund's first ten years of
operations. The manager may
9
<PAGE>
elect to recapture any amounts waived or reimbursed subject to the
following conditions: (1) the manager must request reimbursement within
three years from the year in which the waiver/reimbursement is made, (2)
the Board of Trustees must approve the reimbursement and (3) the Fund must
be able to make the reimbursement and still stay within the operating
expense limitation.
EXAMPLE
This example is intended to help you compare the cost of investing in an SA
Fund to the cost of investing in other mutual funds. The example assumes that
you invest $10,000 in a Fund for the time periods indicated and then sell all of
your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year and that the Fund's operating expenses
remain the same as shown in the table above. Although your actual costs and the
return on your investment may be higher or lower, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
U.S. MARKET FUND U.S. HBTM FUND U. S. SMALL FUND
YEAR CLASS S CLASS I CLASS S CLASS I CLASS S CLASS I
---- ------- ------- ------- ------- ------- -------
1 $137 $111 $142 $116 $158 $131
3 $427 $345 $443 $361 $490 $408
<CAPTION>
INTERNATIONAL HBTM FUND INTERNATIONAL SMALL FUND
YEAR CLASS S CLASS I CLASS S CLASS I
---- ------- ------- ------- -------
<S> <C> <C> <C> <C>
1 $183 $157 $158 $131
3 $568 $487 $490 $408
</TABLE>
PERFORMANCE
The Funds had not commenced operations as of the date of this Prospectus
and, therefore, had no performance information to report.
10
<PAGE>
MANAGEMENT
- --------------------------------------------------------------------------------
RWB Advisory Services Inc., 1190 Saratoga Avenue, San Jose, California 95129, is
the Funds' investment manager. Founded in 1975, the manager provides investment
advisory services to individuals, pension and profit sharing plans, trusts,
estates, charitable organizations and other business entities. Today the firm
has approximately $1.4 billion in assets under management.
The manager, in its capacity as investment adviser, handles the business affairs
of the Funds and has general responsibility for the management of the Funds'
investments. In its capacity as administrator, the manager provides
administrative services to the Funds. The manager has no prior experience as
manager of a mutual fund.
The manager has engaged Dimensional Fund Advisors Inc., 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401, as investment sub-adviser to the Funds.
Since its organization in May 1981, the sub-adviser has provided investment
management services to institutional investors and to other mutual funds. The
sub-adviser presently serves as the investment adviser to four other investment
companies-The DFA Investment Trust Company, DFA Investment Dimensions Group
Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets Value
Fund Inc. Currently, the sub-adviser manages over $28 billion in assets,
including over $14 billion in mutual fund assets.
The sub-adviser, subject to the supervision of the manager, is responsible for
managing the assets of the Funds. The sub-adviser's investment committee makes
investment decisions for the Funds.
The following chart shows the combined annual investment management fees that
each Fund will pay to the manager and the sub-adviser. Fees are stated before
any waiver. Please refer to the Fees and Expenses Table at the beginning of the
prospectus for more information about fee waivers.
<TABLE>
<CAPTION>
INVESTMENT MANAGEMENT FEE
(EXPRESSED AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- -----------------------------------------------------
<S> <C>
Fixed Income Fund 1.04%
U.S. Market Fund .90%
U.S. HBtM Fund 1.12%
U.S. Small Fund 1.23%
International HBtM Fund 1.23%
International Small Fund [ ]%
</TABLE>
YEAR 2000
Like other mutual funds, financial institutions, business organizations and
individuals around the world, the Funds could be adversely affected if the
computer systems used by the manager and the Funds' other service providers do
not properly process and calculate date-related information and data from and
after January 1, 2000. The manager is taking steps that it believes are
reasonably designed to address year 2000 computer-related problems with respect
to the computer systems that it uses and to obtain assurances that comparable
steps are being taken by the Funds' other, major service providers. Although
there can be no assurances, the manager believes that these steps will be
sufficient to avoid any adverse impact on any of the Funds. Similarly, the
companies and other issuers in which the Funds invest could be adversely
affected by year 2000 computer-related problems, and there can be no assurance
that the steps taken, if any, by these issuers will be sufficient to avoid any
adverse impact on a Fund.
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YOUR ACCOUNT
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This section describes how to do business with SA Funds and the services that
are available to shareholders.
HOW TO REACH SA FUNDS
By telephone: 800-366-7266
Call for account information 8:00 a.m. to 5:00 p.m. Pacific time
Monday through Friday
By mail: 1190 Saratoga Avenue
Suite 200
San Jose, California 95125
SHARE CLASSES
Each Fund offers two classes of shares (Class S and Class I). Each class has
its own expense structure, including different shareholder servicing fees.
Both of the classes are offered without a sales charge (load).
We base your eligibility to purchase shares of a class on the type of investor
you are. Investors who maintain aggregate accounts of at least $5,000,000 (or
less at the discretion of SA Funds) may purchase Class I shares. All other
investors must purchase Class S shares.
PURCHASING SHARES
Only clients of investment advisers are eligible to purchase shares of the
Funds.
If you are making an initial investment, you must complete and submit an account
application.
You or your financial representative should notify the manager of any proposed
investment.
If you purchase shares through an omnibus account maintained by a securities
firm, the firm may charge you a fee.
MINIMUM INVESTMENTS
The minimum initial investment is $100,000, unless waived by SA Funds.
There is no minimum for additional investments.
TIMING OF REQUESTS
All requests received by SA Funds' transfer agent before 4:00 p.m. Eastern time
will be executed the same day, at that day's NAV. Orders received after 4:00
p.m. Eastern time will be executed the following day, at that day's NAV.
Financial intermediaries acting on a purchaser's behalf are responsible for
transmitting orders by the deadline.
SELLING SHARES
You or your financial representative may sell shares at any time by furnishing a
redemption request to the manager in the form required by the manager.
INCOMPLETE SELL REQUESTS
SA Funds will attempt to notify you or your financial representative promptly if
any information necessary to process your request is missing.
TIMING OF REQUESTS
All requests received (in the form required by the manager) by SA Funds before
4:00 p.m. Eastern time will be executed the same day, at that day's NAV.
Requests received after 4:00 p.m. Eastern time will be executed the following
day, at that day's NAV.
WIRE TRANSACTIONS
A fee of $10 will be deducted from all proceeds sent by wire, and your bank may
charge an additional fee to receive wired funds.
SELLING SHARES RECENTLY PURCHASED
If you sell shares before the check or electronic funds transfer (ACH) for those
shares has been collected, you will not receive the proceeds until your initial
payment has cleared. This may take up to 15 days after your purchase was
recorded (in rare cases, longer). If you open an account with shares purchased
by wire, you cannot sell those shares until your application has been processed.
EXCHANGES
There is no fee to exchange shares among SA Funds. The exchange privilege is
not intended as a way to speculate on short-term movements in the markets.
You may acquire shares of the Funds by exchanging shares of the SSgA Money
Market Fund and may exchange your shares of the Funds for shares of the
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SSgA Money Market Fund. The SSgA Money Market Fund is a portfolio of the
SSgA Funds, if such shares are offered in your state of residence. The SSgA
Funds is an open-end management investment company with multiple portfolios
advised by State Street Bank and Trust Company, 225 Franklin Street, Boston
MA 02110, and is not affiliated with the SA Funds or the SA Fund's
distributor. Prior to making such an exchange, you should obtain and
carefully read the prospectus for the SSgA Money Market Fund. The exchange
privilege is not an offering or recommendation on the part of the SA Funds or
the distributor of an investment in the SSgA Money Market Fund.
The SSgA Money Market Fund's fundamental investment objective is to maximize
current income, to the extent consistent with the preservation of capital and
liquidity and the maintenance of a stable $1.00 per share net asset value, by
investing in dollar denominated securities with remaining maturities of one year
or less.
Investment in the SSgA Fund is neither insured nor guaranteed by the U.S.
Government. There is no assurance that the SSgA Money Market Fund will maintain
a stable net asset value of $1.00 per share.
ACCOUNTS WITH LOW BALANCES
If the value of your total account with SA Funds falls below $10,000, SA Funds
may send you a notice asking you to bring the account back up to $10,000 or to
close it out. If you do not take action within 60 days, SA Funds may sell your
shares and mail the proceeds to you at the address of record.
ADDITIONAL POLICIES FOR PURCHASES, SALES AND EXCHANGES
- SA Funds reserves the right to reject any purchase order.
- At any time, SA Funds may change any of its purchase or redemption
procedures, and may suspend sale of its shares.
- SA Funds may delay sending your redemption proceeds for up to seven
days, or longer if permitted by the Securities and Exchange
Commission.
- In the interest of economy, SA Funds does not issue share
certificates.
- If accepted by SA Funds, you may purchase shares of the Funds (except
for the International Small Fund) with securities you own.
- SA Funds reserves the right to make payment for redeemed shares wholly
or in part by giving the redeeming shareholder portfolio securities.
The shareholder will pay transaction costs to dispose of these
securities.
- SA Funds may authorize certain financial intermediaries to accept
purchase, redemption and exchange orders from their customers on
behalf of the SA Funds.
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PRICING OF FUND SHARES
- --------------------------------------------------------------------------------
Each Fund's net asset value per share ("NAV") is calculated on each day the New
York Stock Exchange is open. NAV is the value of a single share of a Fund. NAV
is calculated by (1) taking the current value of a Fund's total assets, (2)
subtracting the liabilities and (3) dividing that amount by the total number of
shares owned by shareholders.
The Funds calculate NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. Eastern time. If the New York Stock Exchange
closes early, the Funds accelerate calculation of NAV transaction deadlines to
that time.
Market or fair values of the Funds' portfolio securities are determined as
follows:
- - Equity securities listed on an exchange for which market quotations are
readily available: according to the last quoted sale price of the day.
- - In the absence of recorded sales for listed equity securities: according
to the mean between the most recent quoted bid and asked prices.
- - Unlisted equity securities for which market quotations are readily
available: mean between the most recent quoted bid and asked prices.
- - Shares of an investment company: at the investment company's net asset
value.
- - All other securities: at fair value as determined in good faith by the
Board of Trustees of the Funds.
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. The Funds value foreign securities at
the latest closing price on the exchange on which they are traded immediately
prior to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing of
the New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into U.S. dollars at current rates. Occasionally, events that
affect these values and exchange rates may occur between the times at which they
are determined and the closing of the New York Stock Exchange. If such events
materially affect the value of portfolio securities, these securities may be
valued at their fair value as determined in good faith by the Board of Trustees.
Foreign securities may trade in their primary markets on weekends or other days
when the Fund does not price its shares. Therefore, the value of the portfolio
of a Fund holding foreign securities may change on days when shareholders will
not be able to buy or sell their shares.
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DISTRIBUTIONS
As a shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. Each Fund passes substantially all of its earnings
along to its shareholders as distributions. When a Fund earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a DIVIDEND DISTRIBUTION. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these
gains are distributed to shareholders, it is called a CAPITAL GAIN DISTRIBUTION.
Dividend distributions may be made several times a year, while capital gain
distributions are generally made on an annual basis.
The Fixed Income Fund pays dividends, if any, quarterly.
The U.S. Market Fund, U.S. HBtM Fund, U.S. Small Fund, International HBtM Fund
and International Small Fund pay dividends, if any, annually.
You will receive distributions from a Fund in additional shares of that Fund
unless you elect to receive your distributions in cash.
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FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
Your investment in a Fund will have tax consequences that you should consider.
Some of the more common federal tax consequences are described here, but your
should consult your tax adviser about your own particular situation.
TAXES ON DISTRIBUTIONS
You will generally have to pay federal income tax on all Fund distributions.
Your distributions will be taxed in the same manner whether you receive the
distributions in cash or additional shares of the Fund. Distributions that are
derived from net long-term capital gains generally will be taxed as long-term
capital gains. Dividend distributions and short-term capital gains generally
will be taxed as ordinary income. The tax you pay on a given capital gain
distribution generally depends on how long the Fund held the portfolio
securities it sold. It does not depend on how long you held your Fund shares.
The SA Fixed Income Fund expects that its distributions will consist primarily
of ordinary income. The Equity Funds expect that their distributions will
consist primarily of capital gains.
You generally are required to report all Fund distributions on your federal
income tax return. Each year SA Funds will send you information detailing the
amount of ordinary income and capital gains paid to you for the previous year.
TAXES ON SALES OR EXCHANGES
If you sell your shares of a Fund or exchange them for shares of another Fund,
you generally will be subject to tax on any taxable gain. Your taxable gain is
computed by subtracting your tax basis in the shares from the redemption
proceeds (in the case of a sale) or the value of the shares received (in the
case of an exchange). Because your tax basis depends on the original purchase
price and on the price at which any dividends may have been reinvested, you
should be sure to keep your account statements so that you or your tax preparer
will be able to determine whether a sale or exchange will result in a taxable
gain.
OTHER CONSIDERATIONS
If you buy shares in a Fund just before the Fund makes any distribution, you
will receive some of the purchase price back in the form of a taxable
distribution.
By law, SA Funds must withhold a portion of your proceeds to pay federal income
taxes if you have not provided complete, correct taxpayer information.
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MORE ABOUT SA FUNDS
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FIXED INCOME FUND
The Fund's main strategies and risks are summarized above in the section
entitled SA Fixed Income Fund. Below is further information about the Fund's
investments and strategies and their associated risks. The Fund may also use
strategies and invest in securities described in the SAI. The Fund's objective
may be changed without shareholder approval.
SHORT-TERM TRADING. The Fund may engage in short-term trading, which could
produce higher trading costs and taxable distributions. Frequent trading also
increases transaction costs, which could detract from the Fund's performance.
SECURITIES LENDING. The Fund may seek additional income by lending portfolio
securities to qualified institutions. By reinvesting any cash collateral it
receives in these transactions, the Fund could realize additional income gains
or losses. If the borrower fails to return the securities or the invested
collateral has declined in value, the Fund could lose money.
MATURITY RISK PREMIUMS. The sub-adviser will manage the fund with a view toward
capturing maturity risk premiums. The term "maturity risk premium" means the
anticipated incremental return on investment for holding securities with
maturities of longer than one month compared to securities with a maturity of
one month. This means that although the Fund will primarily invest in foreign
obligations, the Fund will invest in U.S. obligations when the sub-adviser
believes that foreign securities do not offer maturity risk premiums that
compare favorably with those offered by U.S. securities.
DERIVATIVES. Derivatives are financial contracts whose value is based on a
security, a currency exchange rate or a market index. Derivatives can be used
for hedging (attempting to reduce risk by offsetting one investment position
with another) or speculation (taking a position in the hope of increasing
return). The Fund may, but is not required to, use foreign currency contracts to
hedge foreign currency risks. While hedging can guard against potential risks,
it adds to the Fund's expenses and can eliminate some opportunities for gains.
There is also a risk that a derivative intended as a hedge may not perform as
expected. The main risk with derivatives is that some types can amplify a gain
or loss, potentially earning or losing substantially more money than the actual
cost of the derivative. With some derivatives, there is also the risk that the
counterparty may fail to honor its contract terms, causing a loss for the Fund.
The Fund may use futures contracts and options on futures contracts, but only
for the purpose of remaining fully invested and to maintain liquidity to pay
redemptions.
The Fund will not use derivatives for speculative purposes.
DESCRIPTION OF INVESTMENTS
- - U.S. GOVERNMENT OBLIGATIONS--Debt securities issued by the U.S.
Treasury which are direct obligations of the U.S. Government,
including bills, notes and bonds.
- - U.S. GOVERNMENT AGENCY OBLIGATIONS-- Issued or guaranteed by U.S.
Government - sponsored instrumentalities and federal agencies,
including the Federal National Mortgage Association, Federal Home
Loan Bank and the Federal Housing Administration.
- - CORPORATE DEBT OBLIGATIONS-- Nonconvertible corporate debt securities
(e.g., bonds and debentures) which are issued by companies whose
commercial paper is rated Prime 1 by Moody's Investors Services, Inc.
("Moody's") or A1 by S&P and dollar-denominated obligations of foreign
issuers issued in the U.S. If the issuer's commercial paper is
unrated, then the debt security would have to be rated at least AA by
S&P or Aa2 by Moody's. If there is neither a commercial paper rating
nor a rating of the debt security, then the sub-advisor must determine
that the debt security is of comparable quality to equivalent issues
of the same issuer rated at least AA or Aa2.
- - BANK OBLIGATIONS-- Obligations of U.S. banks and savings and loan
associations and dollar - denominated obligations of U.S. subsidaries and
branches of foreign banks, such as certificates of deposit (including
marketable variable rate certificates of deposit) and bankers' acceptances.
Bank certificates of deposit will only be acquired from banks having assets
in excess of $1,000,000,000.
- - COMMERCIAL PAPER-- Rated, at the time of purchase, A1 or better by S&P or
Prime 1 by
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Moody's, or, if not rated, issued by a corporation having an outstanding
unsecured debt issue rated AAA by Moody's or AAA by S&P, and having a
maximum maturity of nine months.
- - REPURCHASE AGREEMENTS-- Instruments through which the Fund purchases
securities ("underlying securities") from a bank, or a registered U.S.
government securities dealer, with an agreement by the seller to repurchase
the security at an agreed price, plus interest at a specified rate. The
underlying securities will be limited to U.S. Government and agency
obligations described above. The Funds will not enter into a repurchase
agreement with a duration of more than seven days if, as a result, more
than 15% of the value of the Fund total assets would be so invested. The
Funds will also only invest in repurchase agreements with a bank if the
bank has at least $1,000,000,000 in assets.
- - FOREIGN GOVERNMENT AND AGENCY OBLIGATIONS-- Bills, notes, bonds and other
debt securities issued or guaranteed by foreign governments, or their
agencies and instrumentalities.
- - SUPRANATIONAL ORGANIZATION OBLIGATIONS-- Debt securities of supranational
organizations such as the World Bank, which are chartered to promote
economic development.
- - FOREIGN ISSUER OBLIGATIONS-- Debt securities of non-U.S. issuers rated AA
or better by S&P or Aa2 or better by Moody's.
- - EURODOLLAR OBLIGATIONS-- Debt securities of domestic or foreign issuers
denominated in U.S. dollars but not trading in the United States.
The Fund's investments may include both fixed and floating rate securities.
Floating rate securities bear interest at rates that vary with prevailing market
rates. Interest rate adjustments are make periodically (e.g., every six
months), usually based on a money market index such as the London Interbank
Offered Rate (LIBOR) or the Treasury bill rate.
EQUITY FUNDS
The Funds' main strategies and risks are summarized above in the section
entitled SA Equity Funds. Below is further information about each Fund's
investments and strategies and their associated risks. The Funds may also use
strategies and invest in securities described in the SAI. Each Fund's objective
may be changed without shareholder approval.
SECURITIES LENDING. Each Fund may seek additional income by lending portfolio
securities to qualified institutions. By reinvesting any cash collateral it
receives in these transactions, the Fund could realize additional gains or
losses. If the borrower fails to return the securities or the invested
collateral has declined in value, the Fund could lose money.
FIXED INCOME SECURITIES. Each Fund may invest in fixed income securities.
Risks of these securities are:
- In general, bond prices rise when interest rates fall and fall when
interest rates rise.
- It is possible that some of the issuers will not make payments on debt
securities held by a Fund, or there could be defaults on repurchase
agreements held by a Fund. Or, an issuer may suffer adverse changes
in financial condition that could lower the credit quality of a
security, leading to greater volatility in the price of the security
and in shares of a Fund. A change in the quality rating of a bond can
affect the bond's liquidity and make it more difficult for the Fund to
sell.
CASH MANAGEMENT. Each Fund may invest up to 20% of its assets in short-term,
high quality, highly-liquid, fixed-income obligations such as money market
instruments and short-term repurchase agreements pending investment or for
liquidity purposes.
INTERNATIONAL SMALL FUND
[The Fund and the underlying funds are part of the same group of investment
companies for purposes of Section 12(d)(1)(G) of the Investment Company Act of
1940, as amended.]
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Under normal market conditions, the sub-adviser expects to allocate a portion of
the Fund's assets to the Pacific Rim Series. The Fund does not currently intend
to invest in the Pacific Rim Series, however, because of certain restrictions on
the repatriation of Malaysian assets by foreign investors.
UNDERLYING FUND SPECIFIC POLICIES. The following are the investment policies of
each underlying fund.
JAPANESE SERIES
The Japanese Series invests in a broad and diverse group of readily marketable
stocks of Japanese small companies which are traded in the Japanese securities
markets. A Japanese small company means a company located in Japan whose market
capitalization is not larger than the largest of those in the smaller one-half
of companies whose securities are listed on the First Section of the Tokyo Stock
Exchange. The Japanese Series will invest primarily in securities traded on the
Tokyo Stock Exchange or in other Japanese securities markets. The Japanese
Series intends to purchase a portion of the stock of each eligible company on a
market capitalization weighted basis. The Japanese Series invests at least 80%
of its total assets in equity securities of Japanese small companies.
U.K. SERIES
The U.K. Series invests in a broad and diverse group of readily marketable
stocks of United Kingdom small companies which are traded principally on the
International Stock Exchange of the United Kingdom and the Republic of Ireland
("ISE"). A United Kingdom small company means a company organized in the
United Kingdom, with shares listed on the ISE whose market capitalization is not
larger than the largest of those in the smaller one-half of companies included
in the FINANCIAL TIMES-ACTUARIES ALL SHARE INDEX ("FTA"). The U.K. Series will
not purchase shares of any company whose market capitalization is less than
$5,000,000. The Series intends to purchase a portion of the stock of each
eligible company on a market capitalization weighted basis. The Series invests
at least 80% of its total assets in equity securities of United Kingdom small
companies.
CONTINENTAL SERIES
The Continental Series invests in a broad and diverse group of readily
marketable stocks of small companies organized in certain European countries
whose shares are traded principally in securities markets located in those
countries. DFA determines company size by comparing the market capitalizations
of companies in all countries in which the Continental Series invests. Small
companies are those whose market capitalizations are not greater than the
largest of those in the smallest 20% of companies listed in the FTA. The
Continental Series will not purchase shares of any company whose market
capitalization is less than $5,000,000. The Series intends to purchase a
portion of the stock of each eligible company on a market capitalization
weighted basis. The Series invests at least 80% of its total assets in equity
securities of European small companies.
PACIFIC RIM SERIES
The Pacific Rim Series invests in a broad and diverse group of readily
marketable stocks of small companies located in Australia, New Zealand and Asian
countries whose share are traded principally in securities markets located in
those countries. Small companies are those whose market capitalizations are
not greater than the largest of those in the smallest 30% of companies listed in
the FTA as combined for the countries in which the Pacific Rim Series invests.
The Pacific Rim Series will not purchase shares of any company whose market
capitalization is less than $5,000,000. The Series intends to purchase a
portion of the stock of each eligible company on a market capitalization
weighted basis. The Series invests at least 80% of its total assets in equity
securities of small companies located in countries in the Pacific Rim.
EMERGING MARKETS SERIES
The Emerging Markets Series invests in companies located in emerging markets.
An emerging market is any country that the International Finance Corporation (a
member of the World Bank Group) considers an emerging market. In determining
what countries have emerging markets with respect to the Series, the data,
analysis and classification of countries published or disseminated by the
International Bank for Reconstruction and Development (a member of the World
Bank Group) and the International Finance Corporation , among other things, will
be considered. Approved emerging markets may not include all such emerging
markets. In determining whether to approve markets for investment, the
sub-adviser will take into account,
19
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among other things, market liquidity, relative availability of investor
information, government regulation, including fiscal and foreign exchange
repatriation rules and the availability of other access to these markets for the
Series. The Series invests only in emerging markets approved by DFA. The
Series invests primarily in equity securities listed on securities exchanges or
actively traded on OTC markets. The Series invests in companies whose aggregate
overall share of the emerging market's total public market capitalization is at
least in the upper 40% of such capitalization. The Series may also invest in
shares of other mutual funds that invest in the approved emerging markets where
access to those markets is otherwise significantly limited.
As of the date of this Prospectus, the Series is authorized to invest in the
following emerging market countries: Argentina, Brazil, Chile, Greece, Hungary,
Indonesia, Israel, Korea, Malaysia, Mexico, Philippines, Portugal, Thailand,
Turkey and Poland. As of September 10, 1998 the Series has discontinued further
investments in Malaysian securities as a result of certain restrictions imposed
by the Malaysian government on the repatriation of assets for foreign investors
such as the Series.
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FOR MORE INFORMATION
TO OBTAIN INFORMATION:
- -------------------------------------
More information on SA Funds is
BY TELEPHONE available free upon request, including
Call 1-800-366-7266 the following:
BY MAIL Write to: STATEMENT OF ADDITIONAL INFORMATION
SA Funds (SAI)
1190 Saratoga Avenue
Suite 200 Provides more details about the funds
San Jose, California 95129 and their policies. A current SAI is
on file with the Securities and
Exchange Commission (SEC) and is
ON THE INTERNET Text-only incorporated by reference (is legally
versions of fund documents considered part of this prospectus).
can be viewed online or
downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by
visiting the SEC's Public
Reference Room in Washington,
DC (phone 1-800-SEC-0330) or
by sending your request and a
duplicating fee to the SEC's
Public Reference Section,
Washington, DC 2054-6009.
- -------------------------------------
SA FUNDS -INVESTMENT TRUST
SEC FILE NUMBER: 811-09195
<PAGE>
SA FUNDS
SA Fixed Income Fund
SA U.S. Market Fund
SA U.S. HBtM Fund
SA U.S. Small Fund
SA International HBtM Fund
SA International Small Fund
STATEMENT OF ADDITIONAL INFORMATION
June [ ], 1999
This Statement of Additional Information ("SAI") provides supplementary
information pertaining to all shares representing interests in each of the
no-load mutual funds listed above (the "Funds"). SA Funds - Investment Trust
(the "Trust") currently offers a selection of six Funds, each of which is
described in this SAI. This SAI is not a prospectus, and should be read only in
conjunction with the Trust's Prospectus dated June [ ], 1999. A copy of the
Prospectus may be obtained by calling (800) 366-7266.
<PAGE>
TABLE OF CONTENTS
Page
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<TABLE>
<CAPTION>
<S> <C>
1. History and General Information.........................................3
2. Description of the Funds and Their Investments and Risks................3
Investments, Strategies and Risks....................................3
Strategies of the U.S. Small Fund and the Underlying Funds of
the International Small Fund....................................20
Strategies of the U.S. HBtM Fund and the International HBtM Fund....22
Tax Management Strategies of the U.S. HBtM Fund, U.S. Small Fund
and the International HBtM Fund....................................23
Fund Policies.......................................................24
3. Management of the Trust................................................25
Trustees and Officers...............................................25
Compensation Table..................................................26
4. Control Persons and Principal Holders of Securities....................26
5. Investment Advisory and Other Services.................................27
Investment Manager and Sub-Adviser..................................27
Distributor.........................................................28
Shareholder Servicing Arrangements..................................28
Administration......................................................28
Custodian...........................................................28
Transfer Agent and Dividend Disbursing Agent........................29
Counsel.............................................................29
Independent Auditors................................................29
6. Brokerage Allocations and Other Practices..............................29
7. Information Concerning Shares..........................................30
8. Purchase, Redemption and Pricing of Shares.............................31
Purchase and Redemption Information.................................31
Determination of Net Asset Value....................................32
9. Taxes..................................................................32
Tax Status of the Funds.............................................32
Taxation of Fund Distributions......................................33
Disposition of Shares...............................................34
Information Relating to Foreign Investments.........................34
Information Relating to Fund Investments............................35
Backup Withholding..................................................37
Other Taxation......................................................37
10. Performance Information.................................................37
11. Financial Statements....................................................39
</TABLE>
No person has been authorized to give any information or to make any
representations not contained in this SAI or in the Prospectus in connection
with the offering made by the Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Funds. The Prospectus does not constitute an offering by the Funds in any
jurisdiction in which such offering may not lawfully be made.
2
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HISTORY AND GENERAL INFORMATION
The Trust was organized as a Delaware business trust on June 16, 1998
under the name RWB Funds - Investment Trust which was changed on June __, 1999
to SA Funds-Investment Trust.
The Trust is an open-end, management investment company. The
Declaration of Trust permits the Trust to offer separate portfolios ("Funds") of
shares of beneficial interest and different classes of shares of each Fund. The
Trust currently offers six Funds, each of which is a diversified mutual fund.
The following Funds are described in this SAI:
SA Fixed Income Fund
SA U.S. Market Fund
SA U.S. HBtM Fund
SA U.S. Small Fund
SA International HBtM Fund
SA International Small Fund
The investment manager of each Fund is RWB Advisory Services Inc.
("RWBAS" or the "Manager"). Dimensional Fund Advisors Inc. ("Dimensional" or the
"Sub-Adviser") serves as sub-adviser for each of the Funds.
RWB Securities, Inc. is the distributor of shares of the Funds.
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
INVESTMENTS, STRATEGIES AND RISKS
The following supplements the information contained in the Prospectus
concerning the investments and investment techniques of the Funds. Each Fund's
investment objective is a non-fundamental policy and may be changed without the
approval of the Fund's shareholders. There can be no assurance that a Fund will
achieve its objective. A description of applicable credit ratings is set forth
in Appendix A to this SAI.
BORROWING. The Funds are authorized to borrow money in amounts up to 5%
of the value of their total assets at the time of such borrowings for temporary
purposes, and are authorized to borrow money in excess of the 5% limit as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act").
This borrowing may be unsecured. The 1940 Act requires the Funds to maintain
continuous asset coverage of 300% of the amount borrowed. If the 300% asset
coverage should decline as a result of market fluctuations or other reasons, the
Funds may be required to sell some of their portfolio holdings within three days
to reduce the debt and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that time.
Borrowed funds are subject to interest costs that may or may not be offset by
amounts earned on the borrowed funds. A Fund may also be required to maintain
minimum average balances in connection with such borrowing or to pay a
commitment or other fees to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
Each Fund may, in connection with permissible borrowings, transfer as collateral
securities owned by the Funds.
CONVERTIBLE DEBENTURES. The International HBtM Fund and each investment
company in which the International Small Company Fund invests ("underlying
fund") may invest up to 5% of their assets in convertible debentures issued by
non-U.S. companies. Convertible debentures include corporate bonds and notes
that may be converted into or exchanged for common stock. These securities are
generally convertible either at a stated price or a stated rate (that is, for a
specific number of shares of common stock or other security). As with other
fixed income securities, the price of a convertible debenture to some extent
varies inversely with interest rates. While providing a fixed income stream
(generally higher in yield than the income derived from a common stock but lower
than that afforded by a nonconvertible debenture), a convertible debenture also
affords the investor an opportunity, through its conversion feature, to
participate in the capital appreciation of the common stock into which it is
convertible. As
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the market price of the underlying common stock declines, convertible debentures
tend to trade increasingly on a yield basis and so may not experience market
value declines to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the price of a
convertible debenture tends to rise as a reflection of the value of the
underlying common stock. To obtain such a higher yield, a Fund may be required
to pay for a convertible debenture an amount in excess of the value of the
underlying common stock. Common stock acquired by a Fund upon conversion of a
convertible debenture will generally be held for so long as the Sub-Adviser
anticipates such stock will provide the Fund with opportunities which are
consistent with the Fund's investment objective and policies.
FOREIGN CURRENCY TRANSACTIONS. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. These
contracts are principally traded in the interbank market conducted directly
between currency traders (usually large, commercial banks) and their customers.
A forward contract generally has no deposit requirement, and no commissions are
charged at any stage for trades.
A Fund may enter into forward contracts in connection with the
management of the foreign currency exposure of its portfolio. When the Fund
enters into a contract for the purchase or sale of a security denominated in a
foreign currency, it may desire to "lock in" the U.S. dollar price of the
security. By entering into a forward contract for the purchase or sale, for a
fixed amount of dollars of the amount of foreign currency involved in the
underlying security transactions, the Fund will be able to protect itself
against a possible loss resulting from an adverse change in the relationship
between the U.S. dollar and the subject foreign currency during the period
between the date the security is purchased or sold and the date on which payment
is made or received.
When the Sub-Adviser believes that one currency may experience a
substantial movement against another currency, including the U.S. dollar, or it
wishes to alter the Fund's exposure to the currencies of the countries in its
investment universe, it may enter into a forward contract to sell or buy foreign
currency in exchange for the U.S. dollar or another foreign currency. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of short-term currency
market movement is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain. Under normal circumstances,
consideration of the prospect for currency parities will be incorporated into
the longer term investment decisions made with regard to overall diversification
strategies. However, the Sub-Adviser believes that it is important to have the
flexibility to enter into such forward contracts when it determines that the
best interests of a Fund will be served.
Each Fund may enter into forward contacts for any other purpose
consistent with the Fund's investment objective and program. The Fund will not
enter into a forward contract, or maintain exposure to any such contract(s), if
the amount of foreign currency required to be delivered thereunder would exceed
the Fund's holdings of liquid securities and currency available for cover of the
forward contract(s). In determining the amount to be delivered under a contract,
the Fund may net offsetting positions.
At the maturity of a forward contract, the Fund may sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and either extend the maturity of the forward contract (by "rolling"
that contract forward) or may initiate a new forward contract.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent the price of the currency it has agreed to sell exceeds the price of
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the currency it has agreed to purchase. Should forward prices increase, the Fund
will suffer a loss to the extent of the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell.
A Fund's dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. However, each Fund
reserves the right to enter into forward foreign currency contracts for
different purposes and under different circumstances. Of course, the Fund is not
required to enter into forward contracts with regard to its foreign currency
denominated securities and will not do so unless deemed appropriate by the
Sub-Adviser. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange at
a future date. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of the hedged currency, at the same time,
they tend to limit any potential gain which might result from an increase in the
value of that currency.
Although each Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. It will do so from time to time, and investors should be aware
of the costs of currency conversion. Although foreign exchange dealers do not
charge a fee for conversion, they do realize a profit based on the difference
(the "spread") between the prices at which they are buying and selling various
currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
resell that currency to the dealer.
Federal tax treatment of forward foreign exchange contracts is
discussed in the section entitled "Futures and Options on Futures -- Federal Tax
Treatment of Futures Contracts, Options and Forward Foreign Exchange Contracts."
FOREIGN SECURITIES. As stated in the Prospectus, certain Funds may
invest in foreign securities. Investors should consider carefully the
substantial risks involved in securities of companies and governments of foreign
nations, which are in addition to the usual risks inherent in domestic
investments.
There may be less publicly available information about foreign
companies comparable to the reports and ratings published about companies in the
United States. Foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards, and auditing practices
and requirements may not be comparable to those applicable to U.S. companies.
Foreign markets have substantially less volume than U.S. markets and securities
of some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. In many foreign countries, there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States. Such concerns are particularly heightened for
emerging markets and Eastern European countries.
Investments in companies domiciled in developing countries may be
subject to potentially higher risks than investments in developed countries.
These risks include: (i) less social, political and economic stability; (ii) the
small current size of the markets for such securities and the currently low or
nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) certain national policies which may restrict a
Fund's investment opportunities, including restrictions on investment in issuers
or industries deemed sensitive to national interest; (iv) foreign taxation; (v)
the absence of developed legal structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain Eastern European countries, of a capital
market structure or market-oriented economy; and (vii) the possibility that
recent favorable economic developments in Eastern Europe may be slowed or
reversed by unanticipated political or social events in such countries.
Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of Eastern European countries expropriated large amounts
of private property in the past, in many cases without adequate compensation,
and there can be no assurance that such expropriation will not occur in the
future. In the event of such expropriation, a Fund could lose a substantial
portion of any investments it has made in the affected countries. Further, no
accounting standards exist in Eastern European countries. Finally, even though
certain Eastern European currencies may be convertible into
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United States dollars, the conversion rates may be artificial to the actual
market values and may be adverse to a Fund.
The Sub-Adviser endeavors to buy and sell foreign currencies on as
favorable a basis as practicable. Some price spread on currency exchange (to
cover service charges) may be incurred, particularly when the Fund changes
investments from one country to another or when proceeds of the sale of Fund
shares in U.S. dollars are used for the purchase of securities in foreign
countries. Also, some countries may adopt policies which would prevent the Fund
from transferring cash out of the country or withhold portions of interest and
dividends at the source. There is the possibility of expropriation,
nationalization or confiscatory taxation, withholding and other foreign taxes on
income or other amounts, foreign exchange controls (which may include suspension
of the ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments that could affect investments in securities of issuers in foreign
nations.
Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of a Fund are uninvested and no return is earned
thereon. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to a Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
A Fund may be affected either unfavorably or favorably by fluctuations
in the relative rates of exchange between the currencies of different nations,
by exchange control regulations and by indigenous economic and political
developments. Changes in foreign currency exchange rates will influence values
within a Fund from the perspective of U.S. investors, and may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities, and net investment income and gains, if any, to be distributed to
shareholders by a Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors. The Sub-Adviser will attempt to avoid unfavorable
consequences and to take advantage of favorable developments in particular
nations where, from time to time, it places a Fund's investments.
The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and from one
type of security to another. Some of these decisions may later prove profitable
and others may not. No assurance can be given that profits, if any, will exceed
losses.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds may enter
into futures contracts and options on futures contracts only for the purpose of
remaining fully invested and to maintain liquidity to pay redemptions. Futures
contracts provide for the future sale by one party and purchase by another party
of a specified amount of defined securities at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges. A
Fund will be required to make a margin deposit in cash or government securities
with a broker or custodian to initiate and maintain positions in futures
contracts. Minimal initial margin requirements are established by the futures
exchange and brokers may establish margin requirements which are higher than the
exchange requirements. After a futures contract position is opened, the value of
the contract is marked to market daily. If the futures contract price changes,
to the extent that the margin on deposit does not satisfy margin requirements,
payment of additional "variation" margin will be required. Conversely, reduction
in the contract value may reduce the required margin resulting in a repayment of
excess margin to a Fund. Variation margin payments are made to and from the
futures broker for as long as the contract remains open. The Funds expect to
earn income on their margin deposits. To the extent that a Fund invests in
futures contracts and options thereon for other than bona fide hedging purposes,
no Fund will enter into such transactions if, immediately thereafter, the sum of
the amount of initial margin deposits and premiums paid for open futures options
would exceed 5% of the Fund's net assets, after taking into account
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unrealized profits and unrealized losses on such contracts it has entered into;
provided, however, that, in the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in calculating the 5%.
Pursuant to published positions of the Securities and Exchange Commission, the
Funds may be required to identify liquid assets, such as cash or liquid
securities (or, as permitted under applicable regulation, enter into offsetting
positions) in an account maintained with the Fund's custodian in connection with
their futures contract transactions in order to cover their obligations with
respect to such contracts.
Positions in futures contracts may be closed out only on an exchange
which provides a secondary market. However, there can be no assurance that a
liquid secondary market will exist for any particular futures contract an any
specific time. Therefore, it might not be possible to close a futures position
and, in the event of adverse price movements, a Fund would continue to be
required to make variation margin deposits. In such circumstances, if a Fund has
insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
A Fund may purchase and sell options on the same types of futures in
which it may invest.
Options on futures are similar to options on underlying instruments
except that options on futures give the purchaser the right, in return for the
premium paid, to assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put), rather than to
purchase or sell the futures contract, at a specified exercise price at any time
during the period of the option. Upon exercise of the option, the delivery of
the futures position by the writer of the option to the holder of the option
will be accompanied by the delivery of the accumulated balance in the writer's
futures margin account which represents the amount by which the market price of
the futures contract, at exercise, exceeds (in the case of a call) or is less
than (in the case of a put) the exercise price of the option on the futures
contract. Purchasers of options who fail to exercise their options prior to the
exercise date suffer a loss of the premium paid.
As an alternative to writing or purchasing call and put options on
stock index futures, a Fund may write or purchase call and put options on stock
indices. Such options would be used in a manner similar to the use of options on
futures contracts.
SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON FUTURES CONTRACTS. The
risks described above for futures contracts are substantially the same as the
risks of using options on futures. In addition, where a Fund seeks to close out
an option position by writing or buying an offsetting option covering the same
underlying instrument, index or contract and having the same exercise price and
expiration date, its ability to establish and close out positions on such
options will be subject to the maintenance of a liquid secondary market. Reasons
for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options, or underlying instruments; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on the exchange that had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at times, render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by an exchange of
special procedures which may interfere with the timely execution of customers'
orders.
ADDITIONAL FUTURES AND OPTIONS CONTRACTS. Although the Funds have no
current intention of engaging in futures or options transactions other than
those described above, they reserve the right to do so. Such futures and options
trading might involve risks which differ from those involved in the futures and
options described above.
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FEDERAL TAX TREATMENT OF FUTURES CONTRACTS, OPTIONS AND FORWARD FOREIGN
EXCHANGE CONTRACTS. Certain option, futures, and forward foreign exchange
contracts, including options and futures on currencies, which are Section 1256
contracts, may result in a Fund entering into straddles.
Open Section 1256 contracts at fiscal year end will be considered to
have been closed at the end of the Fund's fiscal year and any gains or losses
will be recognized for tax purposes at that time. Such gains or losses from the
normal closing or settlement of such transactions will be characterized as 60%
long-term capital gain or loss and 40% short-term capital gain or loss
regardless of the holding period of the instrument. The Fund will be required to
distribute net gains on such transactions to shareholders even though it may not
have closed the transaction and received cash to pay such distributions.
Options, futures and forward foreign exchange contracts, including
options and futures on currencies, which offset a security or currency position
may be considered straddles for tax purposes, in which case a loss on any
position in a straddle will be subject to deferral to the extent of unrealized
gain in an offsetting position. The holding period of the securities or
currencies comprising the straddle may be deemed not to begin until the straddle
is terminated. The holding period of the security offsetting an "in-the-money
qualified covered call" option will not include the period of time the option is
outstanding.
Losses on written covered calls and purchased puts on securities,
excluding certain "qualified covered call" options, may be long-term capital
loss, if the security covering the option was held for more than twelve months
prior to the writing of the option.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of the value of its
net assets (determined at time of acquisition) in securities that are illiquid.
Illiquid securities would generally include securities for which there is a
limited trading market, repurchase agreements and time deposits with
notice/termination dates in excess of seven days, and certain securities that
are subject to trading restrictions because they are not registered under the
Securities Act of 1933, as amended (the "Act"). If, after the time of
acquisition, events cause this limit to be exceeded, the Fund will take steps to
reduce the aggregate amount of illiquid securities as soon as reasonably
practicable in accordance with the policies of the Securities and Exchange
Commission.
A Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Act ("Section 4(2) paper"). A Fund may also purchase securities that are not
registered under the Act, but which can be sold to qualified institutional
buyers in accordance with Rule 144A under the Act ("Rule 144A securities").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws, and generally is sold to institutional investors who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of the issuer or investment dealers which make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold only to other qualified institutional buyers. If a particular
investment in Section 4(2) paper or Rule 144A securities is not determined to be
liquid, that investment will be included within the Fund's limitation on
investment in illiquid securities. The Sub-Adviser will determine the liquidity
of such investments pursuant to guidelines established by the Board of Trustees.
It is possible that unregistered securities purchased by a Fund in reliance upon
Rule 144A could have the effect of increasing the level of the Fund's
illiquidity to the extent that qualified institutional buyers become, for a
period, uninterested in purchasing these securities.
INVESTMENT COMPANY SECURITIES. Each Fund may invest in securities
issued by other investment companies. As a shareholder of another investment
company, a Fund would bear its pro rata portion of the other investment
company's expenses, including advisory fees. These expenses would be in addition
to the expenses each Fund bears directly in connection with its own operations.
Each Fund (other than the International Small Company Fund) currently intends to
limit its investments in securities issued by other investment companies so
that, as determined immediately after a purchase of such securities is made: (i)
not more than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of the value of
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its total assets will be invested in the aggregate in securities of investment
companies as a group; and (iii) not more than 3% of the outstanding voting stock
of any one investment company will be owned by the Fund.
LENDING OF PORTFOLIO SECURITIES. To enhance the return on its
portfolio, each of the Funds may lend securities in its portfolio (subject to a
limit of 33 1/3% of the total assets) to securities firms and financial
institutions, provided that each loan is secured continuously by collateral
adjusted daily to have a market value at least equal to the current market value
of the securities loaned. These loans are terminable at any time, and the Funds
will receive any interest or dividends paid on the loaned securities. In
addition, it is anticipated that a Fund may share with the borrower some of the
income received on the collateral for the loan or the Fund will be paid a
premium for the loan. The risk in lending portfolio securities, as with other
extensions of credit, consists of possible delay in recovery of the securities
or possible loss of rights in the collateral or loss on sale of the collateral
should the borrower fail financially. In determining whether the Funds will lend
securities, the Sub-Adviser will consider all relevant facts and circumstances.
The Funds will only enter into loan arrangements with broker-dealers, banks or
other institutions which the Manager has determined are creditworthy under
guidelines established by the Board of Trustees.
MONEY MARKET INSTRUMENTS. Each Fund may invest from time to time in
"money market instruments," a term that includes, among other instruments, bank
obligations, commercial paper, variable amount master demand notes and corporate
bonds with remaining maturities of 397 days or less.
Bank obligations include bankers' acceptances, negotiable certificates
of deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds will invest in obligations of foreign
banks or foreign branches of U.S. banks only where the Sub-Adviser deems the
instrument to present minimal credit risks, such investments may nevertheless
entail risks that are different from those of investments in domestic
obligations of U.S. banks due to differences in political, regulatory and
economic systems and conditions. All investments in bank obligations are limited
to the obligations of financial institutions having more than $1 billion in
total assets at the time of purchase.
The Funds may also purchase variable amount master demand notes which
are unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, a Fund
may demand payment of the principal of the instrument at any time. The notes are
not typically rated by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, a Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master notes only when the Sub-Adviser deems the investment to
involve minimal credit risk.
NON-DOMESTIC BANK OBLIGATIONS. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-denominated
certificates of deposit issued by offices of foreign and domestic banks located
outside the United States; Eurodollar Time Deposits ("ETDs"), which are U.S.
dollar-denominated deposits in a foreign branch of a U.S. bank or a foreign
bank; Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule Bs
which are obligations issued by Canadian branches of foreign or domestic banks;
Yankee Certificates of Deposit ("Yankee CDs"), which are U.S. dollar-denominated
certificates of deposit issued by a U.S. branch of a foreign bank and held in
the United States; and Yankee Bankers' Acceptances ("Yankee BAs"), which are
U.S. dollar denominated bankers' acceptances issued by a U.S. branch of a
foreign bank and held in the United States.
REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System or any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). The
Sub-Adviser will review and continuously monitor the creditworthiness of the
seller under a repurchase agreement, and will require the seller to maintain
liquid assets segregated on the books of the Fund or the Fund's custodian in an
amount that is greater than the repurchase price.
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Default by, or bankruptcy of, the seller would, however, expose a Fund to
possible loss because of adverse market action or delays in connection with the
disposition of underlying obligations except with respect to repurchase
agreements secured by U.S. Government securities.
The repurchase price under repurchase agreements generally equals the
price paid by a Fund plus interest negotiated on the basis of current short-term
rates (which may be more or less than the rate on the securities underlying the
repurchase agreement).
Securities subject to repurchase agreements will be held, as
applicable, by the Fund's custodian in the Federal Reserve/Treasury book-entry
system or by another authorized securities depositary. Repurchase agreements are
considered to be loans by a Fund under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow funds for temporary
or emergency purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by a
Fund may decline below the repurchase price. A Fund will pay interest on amounts
obtained pursuant to a reverse repurchase agreement. While reverse repurchase
agreements are outstanding, a Fund will maintain cash, U.S. Government
securities or other liquid high-grade securities earmarked on the books of the
Fund or the Fund's custodian in an amount at least equal to the market value of
the securities, plus accrued interest, subject to the agreement.
SUPRANATIONAL BANK OBLIGATIONS. The Fixed Income Fund may invest in the
obligations of supranational banks. Supranational banks are international
banking institutions designed or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., The World
Bank). Obligations of supranational banks may be supported by appropriated but
unpaid commitments of their member countries and there is no assurance these
commitments will be undertaken or met in the future.
U.S. GOVERNMENT OBLIGATIONS. Each Fund may purchase obligations issued
or guaranteed by the U.S. Government and U.S. Government agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of the GNMA, are supported by the full faith and
credit of the U.S. Treasury. Others, such as those of the Export-Import Bank of
the United States, are supported by the right of the issuer to borrow from the
U.S. Treasury; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality
issuing the obligation. No assurance can be given that the U.S. Government would
provide financial support to U.S. government-sponsored instrumentalities if it
is not obligated to do so by law. Examples of the types of U.S. Government
obligations that may be acquired by the Funds include U.S. Treasury Bills,
Treasury Notes and Treasury Bonds and the obligations of Federal Home Loan
Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, FNMA, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, FHLMC, Federal Intermediate Credit
Banks and Maritime Administration.
VARIABLE AND FLOATING RATE INSTRUMENTS. The Fixed Income Fund may
invest in variable and floating rate instruments. Debt instruments may also be
structured to have variable or floating interest rates. Variable and floating
rate obligations purchased by the Fund may have stated maturities in excess of
the Fund's maturity limitation if the Fund can demand payment of the principal
of the instrument at least once during such period on not more than thirty days'
notice (this demand feature is not required if the instrument is guaranteed by
the U.S. Government or an agency thereof). These instruments may include
variable amount master demand notes that permit the indebtedness to vary in
addition to providing for periodic adjustments in the interest rates. The
Sub-Adviser will consider the earning power, cash flows and other liquidity
ratios of the issuers and guarantors of such instruments and, if the instrument
is subject to a demand feature, will continuously monitor their financial
ability to meet payment on demand. Where necessary to ensure that a variable or
floating rate instrument is equivalent to the quality standards applicable to
the Fund, the issuer's obligation to pay the principal of the instrument will be
backed by an unconditional bank letter or line of credit, guarantee or
commitment to lend.
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The absence of an active secondary market for certain variable and
floating rate notes could make it difficult to dispose of the instruments, and
the Fund could suffer a loss if the issuer defaulted or during periods that the
Fund is not entitled to exercise its demand rights.
Variable and floating rate instruments held by the Fund will be subject
to the Fund's limitation on illiquid investments when the Fund may not demand
payment of the principal amount within seven days absent a reliable trading
market.
WARRANTS. Warrants are privileges issued by corporations enabling the
owners to subscribe to and purchase a specified number of shares of the
corporation at a specified price during a specified period of time. The purchase
of warrants involves the risk that a Fund could lose the purchase value of a
warrant if the right to subscribe to additional shares is not exercised prior to
the warrant's expiration. Also, the purchase of warrants involves the risk that
the effective price paid for the warrant added to the subscription price of the
related security may exceed the value of the subscribed security's market price
such as when there is no movement in the level of the underlying security.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (DELAYED-DELIVERY
TRANSACTIONS). Each Fund may purchase securities on a when-issued or delayed
delivery basis. When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by a Fund to purchase or sell particular
securities with payment and delivery to occur at a future date (perhaps one or
two months later). These transactions permit the Fund to lock-in a price or
yield on a security, regardless of future changes in interest rates.
When a Fund agrees to purchase securities on a when-issued or forward
commitment basis, the Fund will earmark cash or liquid portfolio securities
equal to the amount of the commitment. Normally, the Fund will earmark portfolio
securities to satisfy a purchase commitment, and in such a case the Fund may be
required subsequently to earmark additional assets in order to ensure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it earmarks portfolio securities to cover such purchase
commitments than when it earmarks cash.
A Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, a Fund may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases the
Fund may realize a taxable capital gain or loss.
When a Fund engages in when-issued and forward commitment transactions,
it relies on the other party to consummate the trade. Failure of such party to
do so may result in the Fund's incurring a loss or missing an opportunity to
obtain a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase or
a forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
a Fund starting on the day the Fund agrees to purchase the securities. The Fund
does not earn interest on the securities it has committed to purchase until they
are paid for and delivered on the settlement date.
YIELDS AND RATINGS. The yields on certain obligations, including the
money market instruments in which the Funds may invest (such as commercial paper
and bank obligations), are dependent on a variety of factors, including general
money market conditions, conditions in the particular market for the obligation,
the financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other nationally
recognized statistical rating organizations ("NRSROs") represent their
respective opinions as to the quality of the obligations they undertake to rate.
Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and interest rate may
have different market prices.
11
<PAGE>
OTHER. Subsequent to its purchase by a Fund, a rated security may cease
to be rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Board of Trustees or the Sub-Adviser, pursuant to
guidelines established by the Board, will consider such an event in determining
whether the Fund should continue to hold the security in accordance with the
interests of the Fund and applicable regulations of the Securities and Exchange
Commission.
Because the structure of the Equity Funds is based on the relative
market capitalizations of eligible holdings, it is possible that the Funds might
hold at least 5% of the outstanding voting securities of one or more issuers. In
such circumstances, the Trust and the issuer would be deemed "affiliated
persons" under the 1940 Act and certain requirements of the 1940 Act regulating
dealings between affiliates might become applicable. However, based on the
present capitalizations of the groups of companies eligible for purchase by the
Funds and the anticipated amount of a Fund's assets intended to be invested in
such securities, management does not anticipate that a Fund will hold as much as
5% of the voting securities of any issuer.
STRATEGIES OF THE U.S. SMALL FUND AND THE UNDERLYING FUNDS OF THE INTERNATIONAL
SMALL FUND
PORTFOLIO STRUCTURE
Each of the U.S. Small Fund and the underlying funds (except the
Emerging Markets Series) of the International Small Fund (the "Underlying
Funds") is structured by generally basing the amount of each security purchased
on the issuer's relative market capitalization with a view to creating in each
Fund a reasonable reflection of the relative market capitalizations of its
portfolio companies.
The decision to include or exclude the shares of an issuer will be made
on the basis of such issuer's relative market capitalization determined by
reference to other companies located in the same country, except that with
respect to Continental and Pacific Rim Series, such determination shall be made
by reference to other companies located in all countries in which the Underlying
Funds invest. Company size is measured in terms of local currencies in order to
eliminate the effect of variations in currency exchange rates, except that
Continental and Pacific Rim Series each will measure company size in terms of a
common currency. Even though a company's stock may meet the applicable market
capitalization criterion, it may not be purchased if (i) in the Sub-Adviser's
judgment, the issuer is in extreme financial difficulty, (ii) the issuer is
involved in a merger or consolidation or is the subject of an acquisition or
(iii) a significant portion of the issuer's securities are closely held.
Further, securities of real estate investment trusts will not be acquired
(except as a part of a merger, consolidation or acquisition of assets). In
addition, the Sub-Adviser may exclude the stock of a company that otherwise
meets applicable market capitalization criterion if the Sub-Adviser determines
in its best judgment that other conditions exist that make the purchase of such
stock inappropriate.
Deviation from strict market capitalization weighting will also occur
because the Sub-Adviser intends to purchase round lots only. Furthermore, in
order to retain sufficient liquidity, the relative amount of any security held
may be reduced from time to time from the level which strict adherence to market
capitalization weighting would otherwise require. A portion, but generally not
in excess of 20%, of assets may be invested in interest-bearing obligations,
such as money-market instruments, for this purpose, thereby causing further
deviation from strict market capitalization weighting.
Block purchases of eligible securities may be made at opportune prices
even though such purchases exceed the number of shares which, at the time of
purchase, strict adherence to the policy of market capitalization weighting
would otherwise require. In addition, each of the U.S. Small Fund and the
Underlying Funds may, in exchange for the issuance of shares, acquire securities
eligible for purchase or otherwise represented in their portfolios at the time
of the exchange. While such purchases and acquisitions might cause a temporary
deviation from market capitalization weighting, they would ordinarily be made in
anticipation of further growth of assets.
12
<PAGE>
If securities must be sold in order to obtain funds to make redemption
payments, they may be repurchased as additional cash becomes available. In most
instances, however, management would anticipate selling securities which had
appreciated sufficiently to be eligible for sale and, therefore, would not need
to repurchase such securities.
Changes in the composition and relative ranking (in terms of market
capitalization) of the stocks which are eligible for purchase take place with
every trade when the securities markets are open for trading due, primarily, to
price fluctuations of such securities. On a not less than semi-annual basis, the
Sub-Adviser will determine the market capitalization of the largest small
company eligible for investment. Common stocks whose market capitalizations are
not greater than such company will be purchased. Additional investments
generally will not be made in securities which have appreciated in value
sufficiently to be excluded from the Sub-Adviser's then current market
capitalization limit for eligible portfolio securities. This may result in
further deviation from strict market capitalization weighting and such deviation
could be substantial if a significant amount of holdings increase in value
sufficiently to be excluded from the limit for eligible securities, but not by a
sufficient amount to warrant their sale. A further deviation from market
capitalization weighting may occur if the Fund or Underlying Fund invests a
portion of its assets in privately placed convertible debentures.
It is the Sub-Adviser's belief that the stocks of small companies
offer, over a long term, a prudent opportunity for capital appreciation, but, at
the same time, selecting a limited number of such issues for investment involves
greater risk than investing in a large number of them.
Generally, current income is not sought as an investment objective and
investment will not be based upon an issuer's dividend payment policy or record.
However, many of the companies whose securities will be selected for investment
do pay dividends. It is anticipated, therefore, that dividend income will be
received.
PORTFOLIO TRANSACTIONS
On a periodic basis, the Sub-Adviser will review the holdings of the
Fund and each Underlying Fund and determine which, at the time of such review,
are no longer considered small U.S., Japanese, United Kingdom, European or
Pacific Rim companies. The present policy of the Sub-Adviser (except with
respect to the U.S. Small Fund) is to consider portfolio securities for sale
when they have appreciated sufficiently to rank, on a market capitalization
basis, more than one full decile higher than the company with the largest market
capitalization that is eligible for purchase by the Fund or Underlying Fund as
determined periodically by the Sub-Adviser. The Sub-Adviser may, from time to
time, revise that policy if, in the opinion of the Sub-Adviser, such revision is
necessary to maintain appropriate market capitalization weighting.
Securities which have depreciated in value since their acquisition will
not be sold solely because prospects for the issuer are not considered
attractive or due to an expected or realized decline in securitie's prices in
general. Securities may be disposed of, however, at any time when, in the
Sub-Adviser's judgment, circumstances, such as (but not limited to) tender
offers, mergers and similar transactions, or bids made for block purchases at
opportune prices warrant their sale. Generally, securities will not be sold to
realize short-term profits, but when circumstances warrant, they may be sold
without regard to the length of time held. Generally, securities will be
purchased with the expectation that they will be held for longer than one year
and will be held until such time as they are no longer considered an appropriate
holding in light of the policy of maintaining portfolios of companies with small
market capitalizations.
In the case of the U.S. Small Fund, management strategies used by the
Sub-Adviser to defer the realization of net capital gains and to minimize
dividend income may, from time to time, cause deviation from market
capitalization weighting. The U.S. Small Fund should not be expected to adhere
to its market capitalization weighting with the same precision as the other
Funds.
13
<PAGE>
STRATEGIES OF THE U.S. HBTM FUND AND INTERNATIONAL HBTM FUND
Each of the U.S. HBtM Fund and International HBtM Fund will be
structured on a market capitalization basis, by generally basing the amount of
each security purchased on the issuer's relative market capitalization, with a
view to creating a reasonable reflection of the relative market capitalizations
of its portfolio companies. However, the Sub-Adviser may exclude the securities
of a company that otherwise meets the applicable criteria if the Sub-Adviser
determines in its best judgment that other conditions exist that make the
inclusion of such security inappropriate.
As of the date of this SAI, the International HBtM Fund intends to
invest in companies having at least $800 million of market capitalization, and
the Fund will be approximately market capitalization weighted. The Sub-Adviser
may reset such floor from time to time to reflect changing market conditions. In
determining market capitalization weights, the Sub-Adviser, using its best
judgment, will seek to eliminate the effect of cross holdings on the individual
country weights. As a result, the weighting of certain countries in the
International HBtM Fund may vary from their weighting in international indices
such as those published by The Financial Times, Morgan Stanley Capital
International or Salomon/Russell. The Sub-Adviser, however, will not attempt to
account for cross holding within the same country.
Deviation from strict market capitalization weighting will also occur
because the Funds intend to purchase round lots only. In order to retain
sufficient liquidity, the relative amount of any security held by a Fund may be
reduced, from time to time, from the level which strict adherence to market
capitalization weighting would otherwise require. A portion, but generally not
in excess of 20%, of a Fund's assets may be invested in interest-bearing
obligations, such as money market instruments and short-term repurchase
agreements, thereby causing further deviation from strict market capitalization
weighting. Such investments would be made on a temporary basis pending
investment in equity securities pursuant to the Funds' investment objectives. A
further deviation from market capitalization weighting may occur if the
International HBtM Fund invests a portion of its assets in privately placed
convertible debentures.
The Funds may make block purchases of eligible securities at opportune
prices even though such purchases exceed the number of shares which, at the time
of purchase, strict adherence to the policy of market capitalization weighting
would otherwise require. In addition, the Funds may acquire securities eligible
for purchase at the time of the exchange or otherwise represented in their
portfolios in exchange for the issuance of their shares. While such purchases
and acquisitions might cause a temporary deviation from market capitalization
weighting, they would ordinarily be made in anticipation of further growth of
the assets of the Funds.
Changes in the composition and relative ranking (in terms of market
capitalization and book to market ratio) of the stocks which are eligible for
purchase by the Funds take place with every trade when the securities markets
are open for trading due, primarily, to price fluctuations of such securities.
On a periodic basis, the Sub-Adviser will determine the minimum market
capitalization required to be considered for investment by the Funds. Only
common stocks whose market capitalizations are not less than the respective
minimum will be purchased by a Fund. Additional investments will not be made in
securities which have depreciated in value to such extent that they are not then
considered by the Sub-Adviser to be large companies. This may result in further
deviation from market capitalization weighting, and such deviation could be
substantial if a significant amount of the Fund's holdings decrease in value
sufficiently to be excluded from the then current market capitalization
requirement for eligible securities, but not by a sufficient amount to warrant
their sale.
It is the Sub-Adviser's belief that the stocks of large companies with
high book to market ratios offer, over a long term, a prudent opportunity for
capital appreciation, but, at the same time, selecting a limited number of such
issues for inclusion in the Funds involves greater risk than including a large
number of them. The Sub-Adviser does not anticipate that a significant number of
securities which meet the market capitalization criteria will be selectively
excluded from the Funds.
14
<PAGE>
The Funds do not seek current income as investment objectives and
investments will not be based upon an issuer's dividend payment policy or
record. However, many of the companies whose securities will be included in the
Funds do pay dividends. It is anticipated, therefore, that the Funds will
receive dividend income.
In the case of the International HBtM Fund, securities which have
depreciated in value since their acquisition will not be sold by the Funds
solely because prospects for the issuer are not considered attractive, or due to
an expected or realized decline in securities prices in general. Securities may
be disposed of, however, at any time when, in the Sub-Adviser's judgment,
circumstances warrant their sale, such as tender offers, mergers and similar
transactions, or bids made for block purchases at opportune prices. Generally,
securities will not be sold to realize short-term profits, but when
circumstances warrant, they may be sold without regard to the length of time
held. Generally, securities will be purchased with the expectation that they
will be held for longer than one year, and will be held until such time as they
are no longer considered an appropriate holding in light of the policy of
maintaining a portfolio of companies with large market capitalizations and high
book to market ratios.
TAX MANAGEMENT STRATEGIES OF THE U.S. HBTM FUND, U.S. SMALL FUND AND THE
INTERNATIONAL HBTM FUND
These Funds may try to minimize the impact of federal taxes on returns
by managing their portfolios in a manner that will defer the realization of net
capital gains where possible and may minimize ordinary income.
When selling securities, each Fund typically will select the highest
cost shares of the specific security in order to minimize the realization of
capital gains. In certain cases, the highest cost shares may produce a
short-term capital gain. Since short-term capital gains are taxed at higher tax
rates than long-term capital gains, the highest cost shares with a long-term
holding period may be disposed of instead. Each Fund also will seek, when
possible, not to dispose of a security until the long-term holding period for
capital gains for tax purposes has been satisfied. Additionally, each Fund may,
when consistent with all other tax management policies, sell securities in order
to realize capital losses. Realized capital losses can be used to offset
realized capital gains, thus reducing capital gains distributions. However,
realization of capital gains is not entirely within the Sub-Adviser's control.
Capital gains distributions may vary considerably from year to year; there will
be no capital gains distributions in years when a Fund realizes net capital
losses.
The timing of purchases and sales of securities may be managed to
minimize dividends to the extent possible. With respect to dividends that are
received, the Funds may not be eligible to flow through the dividends received
deduction to corporate shareholders, if because of timing activities, the
requisite holding period is not met. Except for the U.S. HBtM Fund, portfolio
holdings may be managed to minimize high dividend-yielding securities and to
emphasize low dividend-yielding securities.
The Funds are expected to deviate from their market capitalization
weightings to a greater extent than the other Funds. For example, the
Sub-Adviser may exclude the stock a company that meets applicable market
capitalization criterion in order to avoid dividend income, and the Sub-Adviser
may sell the stock of a company that meets applicable market capitalization
criterion in order to realize a capital loss. Additionally, while the Funds are
managed so that securities will generally be held for longer than one year, the
Funds may dispose of any securities whenever the Sub-Adviser determines that
such disposition would be consistent with the tax management strategies of the
Funds.
Although the Sub-Adviser may manage each Fund to minimize the
realization of capital gains and taxable dividend distributions during a
particular year, the Funds may nonetheless distribute taxable gains and taxable
income to shareholders from time to time. Furthermore, shareholders may be
required to pay taxes on capital gains realized, if any, upon redemption of
shares of a Fund, if the amount realized on redemption is greater than the
amount the shareholder paid for the shares.
15
<PAGE>
FUND POLICIES
FUNDAMENTAL POLICIES. Each Fund is subject to the investment
limitations enumerated in this section which may be changed with respect to a
particular Fund only by a vote of the holders of a majority of such Fund's
outstanding shares. As used in this SAI and in the Prospectus, a "majority of
the outstanding shares" of a Fund means the lesser of (a) 67% of the shares of
the particular Fund represented at a meeting at which the holders of more than
50% of the outstanding shares of such Fund are present in person or by proxy, or
(b) more than 50% of the outstanding shares of such Fund.
1. No Fund may invest more than 25% of its total assets in any
one industry (securities issued or guaranteed by the United
States Government, its agencies or instrumentalities are not
considered to represent industries).
2. No Fund may with respect to 75% of the Fund's assets, invest
more than 5% of the Fund's assets (taken at a market value at
the time of purchase) in the outstanding securities of any
single issuer or own more than 10% of the outstanding voting
securities of any one issuer, in each case other than
securities issued or guaranteed by the United States
Government, its agencies or instrumentalities.
3. No Fund may borrow money or issue senior securities (as
defined in the 1940 Act) except that the Funds may borrow
amounts not exceeding 33 1/3% of its total assets (including
the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) valued at
the time the borrowing is made and additionally for temporary
or emergency purposes in amounts not exceeding 5% of its total
assets.
4. No Fund may pledge, mortgage or hypothecate its assets other
than to secure borrowings permitted by investment limitation 3
above (collateral arrangements with respect to margin
requirements for options and futures transactions are not
deemed to be pledges or hypothecations for this purpose).
5. No Fund may make loans of securities to other persons in
excess of 33 1/3% of a Fund's total assets; provided the Funds
may invest without limitation in short-term debt obligations
(including repurchase agreements) and publicly distributed
debt obligations.
6. No Fund may underwrite securities of other issuers, except
insofar as a Fund may be deemed an underwriter under the
Securities Act of 1933, as amended, in selling portfolio
securities.
7. No Fund may purchase or sell real estate or any interest
therein, including interests in real estate limited
partnerships, except securities issued by companies (including
real estate investment trusts) that invest in real estate or
interests therein.
8. No Fund may purchase securities on margin, except for the use
of short-term credit necessary for the clearance of purchases
and sales of portfolio securities, but the Funds may make
margin deposits in connection with transactions in options,
futures and options on futures.
9. No Fund may invest in commodities or commodity futures
contracts, provided that this limitation shall not prohibit
the purchase or sale by the Fund of forward foreign currency
exchange contracts, financial futures contracts and options on
financial futures contracts, foreign currency futures
contracts, and options on securities, foreign currencies and
securities indices, as permitted by the Fund's prospectus.
NON-FUNDAMENTAL POLICIES. Additional investment restrictions adopted by
each Fund, which may be changed by the Board of Trustees, provide that a Fund
may not:
16
<PAGE>
1. Invest more than 15% of its net assets (taken at market value
at the time of purchase) in securities which cannot be readily
sold or disposed of within the ordinary course of business
within seven days at approximately the value at which the Fund
has valued the investment;
2. Purchase or sell interests in oil, gas or other mineral
exploration or development plans or leases;
3. Make investments for the purpose of exercising control or
management; or
4 Invest in other investment companies except as permitted under
the 1940 Act.
If a percentage limitation is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in the
value of a Fund's investments will not constitute a violation of such
limitation, except that any borrowing by a Fund that exceeds the fundamental
investment limitations stated above must be reduced to meet such limitations
within the period required by the 1940 Act (currently three days). Otherwise, a
Fund may continue to hold a security even though it causes the Fund to exceed a
percentage limitation because of fluctuation in the value of the Fund's assets.
MANAGEMENT OF THE TRUST
The management of the Trust is supervised by the Board of Trustees
under the laws of the State of Delaware. Subject to the provisions of the
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust and their principal
occupations during the past five years are as set forth below. An asterisk
indicates a Trustee who may be deemed to be an "interested person" (as defined
by the 1940 Act) of the Trust.
<TABLE>
<CAPTION>
<S><C>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
------------------------------- -------------------------- ------------------------------------------
Bryan W. Brown Trustee Self Employed Management Consultant (since
950 Hayman Place 1992 )
Los Altos, CA 94024
DOB: 02/09/45
David G. Booth* Trustee President and Chairman-Chief Executive
1299 Ocean Avenue Officer of the following companies:
Santa Monica, CA 90401 Dimensional Fund Advisors Inc., DFA
DOB: 12/02/46 Securities Inc., DFA Australia Limited,
DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value Fund
Inc.; Trustee, President and Chairman-
Chief Executive Officer of the DFA
Investment Trust Company (registered
investment company); Chairman and
Director, Dimensional Fund Advisors Ltd.
17
<PAGE>
John J. Bowen, Jr.* Trustee, President CEO and President, Assante Financial Group
1190 Saratoga Avenue, Suite 200 and Chief Executive Officer Inc. (since July 1998); CEO, Registered
San Jose, CA 95120 Principal and President, RWB Securities
DOB: 10/01/55 Inc. (since July 1998); CEO and President,
RWB Advisory Services Inc. (since July
1998); CEO, Registered Principal and
President, Reinhardt Werba Bowen
Securities, Inc. (December 1993 to October
1998); CEO, Director and President,
Reinhardt, Werba, Bowen, Inc. (investment
adviser) (July 1980 to October 1998).
Patrick Keating* Trustee Director, Assante Capital Management Inc.
Commodity Exchange Tower (since September 1998); President and CEO,
1500-360 Main Street Loring Ward Investment Counsel Ltd.
Winnipeg, Manitoba, Canada, R3C3Z3 ("Loring Ward") (since September 1998);
DOB: 12/21/54 Executive Vice President, Loring Ward
(January 1996 to September 1998); Manager,
Client Services, Loring Ward (May 1995 to
December 1995); General Manager, Advance
Electronics Ltd. (retail organization)
(until May 1995).
Harold M. Shefrin Trustee Professor of Finance, Santa Clara
Leavey School of Business University.
Santa Clara University
Santa Clara, CA 95053
DOB: 07/27/48
Alexander B. Potts Vice President and Secretary Vice President of Advisor Services and
1190 Saratoga Avenue, Suite 200 Investment Operations, RWB Advisory
San Jose, CA 95120 Services Inc. (since April 1990).
DOB: 06/14/67
Michael Clinton Treasurer and Chief Financial and Treasurer and CFO, RWB Advisory Services
1190 Saratoga Avenue, Suite 200 Accounting Officer Inc. (since July 1998); Treasurer and CFO,
San Jose, CA 95120 Reinhardt, Werba, Bowen Inc. (June 1995 to
DOB: 10/06/66 July 1998); CPA, Crawford, Pimentel & Co.,
Inc. (accounting firm) (September 1989 to
June 1995).
</TABLE>
18
<PAGE>
COMPENSATION TABLE
For their services as trustees, the trustees who are not "interested
persons" (as defined in the 1940 Act) receive a $5,000 annual retainer fee and
$1,000 per meeting attended, as well as reimbursement for expenses incurred in
connection with attendance at such meetings. The interested trustees receive no
compensation for their services as trustees. The following table summarizes the
estimated compensation to be paid by the Trust to its trustees during the
current fiscal year. The aggregate compensation is provided for the Trust, which
is comprised of six Funds.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
FROM THE FUND PENSION OR RETIREMENT
NAME OF TRUSTEE BENEFITS
- ----------------------------- --------------------------- ---------------------------
<S> <C> <C>
Bryan W. Brown $9,000 None
David G. Booth None None
John J. Bowen, Jr. None None
Patrick Keating None None
Harold M. Shefrin $9,000 None
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the date of this SAI, RWBAS may be deemed to control the Funds
because it is the record and beneficial owner of 100% of each class of each
Fund. As a result, RWBAS will be able to affect the outcome of matters presented
for a vote of each Fund's shareholders.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT MANAGER AND SUB-ADVISER
The Trust, on behalf of each Fund, has entered into an Investment
Advisory and Administrative Services Agreement (the "Agreement") with the
Manager, an indirect, wholly-owned subsidiary of Assante Capital Management,
Inc., which is a privately held financial services company located in Winnipeg,
Canada.
The Agreement will continue in effect for a period of two years from
its effective date. If not sooner terminated, the Agreement will continue in
effect for successive one year periods thereafter, provided that its continuance
is specifically approved annually by (a) the vote of a majority of the Board of
Trustees who are not parties to the Agreement or interested persons (as defined
in the 1940 Act), cast in person at a meeting called for the purpose of voting
on approval, and (b) either (i) the vote of a majority of the outstanding voting
securities of the affected Fund, or (ii) the vote of a majority of the Board of
Trustees. The Agreement is terminable with respect to a Fund by vote of the
Board of Trustees, or by the holders of a majority of the outstanding voting
securities of the Fund, at any time without penalty, on 60 days' written notice
to the Manager. The Manager may also terminate its advisory relationship with
respect to a Fund without penalty on 90 days' written notice to the Trust, as
applicable. The Advisory Agreement terminates automatically in the event of its
assignment (as defined in the 1940 Act).
For the advisory services provided pursuant to the Agreement, the
Manager is entitled to a fee from each Fund computed daily and payable monthly
at the rate of .90% of the average daily net assets of each Fund.
For the administrative services provided, the Manager is entitled to a
fee from each Fund computed daily and payable monthly at the rate of .05% of the
average daily net assets of each Fund.
19
<PAGE>
Dimensional is the Sub-Adviser to each Fund. Dimensional is a Delaware
corporation and is registered with the Securities and Exchange Commission as an
investment adviser. David G. Booth and Rex A. Sinquefield, directors and
officers of Dimensional and shareholders of approximately 51% of Dimensional's
outstanding stock, may be considered controlling persons of the Sub-Adviser.
The Trust has entered into a sub-advisory agreement (the "Sub-Advisory
Agreement") with Dimensional. Under the terms of the Sub-Advisory Agreement,
Dimensional provides sub-advisory services to the Funds. Subject to supervision
of the Manager, Dimensional is responsible for the management of each the Fund's
portfolio, including decisions regarding purchases and sales of portfolio
securities by the Funds. Dimensional is also responsible for arranging the
execution of portfolio management decisions, including the selection of brokers
to execute trades and the negotiation of brokerage commissions in connection
therewith.
The Sub-Advisory Agreement will continue in effect with respect to a
Fund for a period of two years from its effective date. If not sooner
terminated, the Sub-Advisory Agreement will continue in effect for successive
one year periods thereafter, provided that each continuance is specifically
approved annually by (a) the vote of a majority of the Board of Trustees who are
not parties to the Sub-Advisory Agreement or interested persons (as defined in
the 1940 Act), cast in person at a meeting called for the purpose of voting on
approval, and (b) the vote of a majority of the Board of Trustees. The
Sub-Advisory Agreement is terminable by vote of the Board of Trustees, or, with
respect to a Fund, by the holders of a majority of the outstanding voting
securities of that Fund, at any time without penalty, on 60 days' written notice
to Dimensional. Once the Sub-Advisory Agreement has been in effect for a period
of not less than four years, it may be terminated by the Manager or Dimensional
as to all the Funds by giving not less than twelve month's written notice. The
Sub-Advisory Agreement terminates automatically in the event of its assignment
(as defined in the 1940 Act).
For the sub-advisory services provided, Dimensional is entitled to a
fee from each Fund [(other than the International Small Fund)] computed daily
and payable monthly at an annual rate based on each Fund's average daily net
assets as set forth below. [The Fund will not pay a fee to Dimensional for its
sub-advisory services to the International Small Fund. Dimensional, however,
receives fees from the Underlying Funds of the International Small Fund for
providing advisory services to those Underlying Funds.]
<TABLE>
<CAPTION>
FUND FEE
- ---- ---
<S> <C>
Fixed Income Fund .19%
U.S. Market Fund .05%
U.S. HBtM Fund .27%
U.S. Small Fund .38%
International HBtM Fund .38%
International Small Fund [ ]%
</TABLE>
DISTRIBUTOR
RWB Securities, Inc. (the "Distributor") and the Trust have entered
into a distribution agreement, under which the Distributor, as agent, sells
shares of each Fund on a continuous basis. The Distributor's principal offices
are located at 1190 Saratoga Avenue, Suite 200, San Jose, CA 95129. The
Distributor is an indirect, wholly-owned subsidiary of Assante Capital
Management, Inc. and is an affiliate of RWBAS. The Distributor receives no
compensation for distribution of the Funds shares.
SHAREHOLDER SERVICING ARRANGEMENTS
Under a Shareholder Servicing Agreement with the Trust, the Manager
performs various services for the Funds, including establishing a toll-free
telephone number for shareholders of each Fund to use to obtain up-to-date
account information; providing to shareholders quarterly and other reports with
respect to the performance of each Fund; and providing shareholders with such
information regarding the operations and affairs of each Fund, and their
investment in its shares, as the shareholders or the Board of Trustees may
reasonably request. The Manager is paid an annual service fee at the rate of up
to 0.25% of the value of average daily net assets of the Class S shares, and an
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annual service fee at the rate of up to 0.05% of the value of average daily net
assets of the Class I shares of each Fund.
ADMINISTRATION
State Street Bank and Trust Company ("State Street"), whose principal
business address is 225 Franklin Street, Boston, Massachusetts, 02110, serves as
sub-administrator for the Trust, pursuant to a sub-administration agreement (the
"Sub-Administration Agreement") with the manager and the Trust.
Under the Sub-Administration Agreement, State Street has agreed to
oversee the computation of each Fund's net asset value, net income and realized
capital gains, if any; furnish statistical and research data, clerical services,
and stationery and office supplies; prepare and file various reports with the
appropriate regulatory agencies; and prepare various materials required by the
Securities and Exchange Commission. For providing these services, State Street
receives a fee which is calculated daily and paid monthly at an annual rate
based on the average daily net assets of each Fund as follows: 0.06% on the
first $750 million of net assets, plus 0.04% for net assets between $750 million
and $1.5 billion, plus 0.02% on net assets over $1.5 billion. There is a minimum
charge of $85,000 per fund.
CUSTODIAN
State Street is the custodian of each Fund's assets pursuant to a
custodian agreement (the "Custody Contract") with the Trust. State Street is
also the custodian with respect to the custody of foreign securities held by the
Funds. Under the Custody Contract, State Street (i) holds and transfers
portfolio securities on account of each Fund, (ii) accepts receipts and makes
disbursements of money on behalf of each Fund, (iii) collects and receives all
income and other payments and distributions on account of each Fund's securities
and (iv) makes periodic reports to the Board of Trustees concerning the Funds'
operations.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street serves as the transfer agent and dividend disbursing agent
for the Funds.
COUNSEL
The law firm of Paul, Hastings, Janofsky & Walker LLP, 345 California
Street, San Francisco, California 94104, has passed upon certain legal matters
in connection with the shares offered by the Funds and serves as counsel to the
Trust.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLC, 555 California Street, San Francisco,
California 94101, serves as the independent auditors for the Trust, providing
audit and accounting services including: examination of each Fund's annual
financial statements, assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission; and
preparation of income tax returns.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
Subject to the general supervision of the Trustees, the Sub-Adviser
makes decisions with respect to and places orders for all purchases and sales of
portfolio securities for the Funds.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers.
Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
21
<PAGE>
an instrument. With respect to over-the-counter transactions, the Sub-Adviser
will normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of foreign and domestic securities purchased
from and sold to dealers include a dealer's mark-up or mark-down.
The Sub-Adviser will place portfolio transaction with a view to
receiving the best price and execution.
Transactions may be placed with brokers who provide the Sub-Adviser
with investment research, such as reports concerning individual issuers,
industries and general economic and financial trends and other research
services. The Sub-Advisory Agreement permits the Sub-Adviser to cause the Funds
to pay a broker or dealer which furnishes brokerage and research services a
higher commission than that which might be charged by another broker or dealer
for effecting the same transaction, provided that the Sub-Adviser determines in
good faith that such commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either the particular transaction or the overall responsibilities of
the Sub-Adviser to the Funds.
Supplementary research information so received is in addition to, and
not in lieu of, services required to be performed by the Sub-Adviser and does
not reduce the advisory fees payable to the Sub-Adviser. It is possible that
certain of the supplementary research or other services received will primarily
benefit one or more other investment companies or other accounts for which
investment discretion is exercised. Conversely, a Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.
Investment decisions for each Fund and for other investment accounts
managed by the Sub-Adviser are made independently of each other in the light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then averaged as to price and allocated as to
amount in a manner deemed equitable to each such account. While in some cases
this practice could have a detrimental effect on the price or value of the
security as far as a Fund is concerned, in other cases it is believed to be
beneficial to a Fund. To the extent permitted by law, the Sub-Adviser may
aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for other investment companies or accounts in executing
transactions.
Portfolio securities will not be purchased from or sold to the Manager,
Sub-Adviser, Distributor or any affiliated person (as defined in the 1940 Act)
of the foregoing entities except to the extent permitted by Securities and
Exchange Commission exemptive order or by applicable law. A Fund will not
purchase securities during the existence of any underwriting or selling group
relating to such securities of which the Manager, Sub-Adviser or any affiliated
person (as defined in the 1940 Act) thereof is a member except pursuant to
procedures adopted by the Trust's Board of Trustees in accordance with Rule
10f-3 under the 1940 Act.
INFORMATION CONCERNING SHARES
The Trust is a Delaware business trust. Under the Declaration of Trust,
the beneficial interest in the Trust may be divided into an unlimited number of
full and fractional transferable shares. The Declaration of Trust authorizes the
Board of Trustees to classify or reclassify any unissued shares of the Trust
into one or more classes by setting or changing, in any one or more respects,
their respective designations, preferences, conversion or other rights, voting
powers, restrictions, limitations, qualifications and terms and conditions of
redemption. Currently, the Trust's Board of Trustees has authorized the issuance
of an unlimited number of shares of beneficial interest in the Trust,
representing interests in six separate series, each of which is a Fund. Each
Fund currently offers two classes of shares.
In the event of a liquidation or dissolution of the Trust, shareholders
of a particular Fund would be entitled to receive the assets available for
distribution belonging to such Fund, and a proportionate distribution, based
upon the relative net asset values of the Funds, of any general assets not
belonging to any particular Fund which are available for distribution.
Shareholders of a Fund are entitled to participate in the net distributable
assets of the
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<PAGE>
particular Fund involved on liquidation, based on the number of shares of the
Fund that are held by each shareholder.
Shares of the Trust have noncumulative voting rights and, accordingly,
the holders of more than 50% of the Trusts outstanding shares (irrespective of
class) may elect all of the trustees. Shares have no preemptive rights and only
such conversion and exchange rights as the Board may grant in its discretion.
When issued for payment as described in the applicable Prospectus, shares will
be fully paid and non-assessable by the Trust.
Shareholder meetings to elect trustees will not be held unless and
until such time as required by law. At that time, the trustees then in office
will call a shareholders' meeting to elect trustees. Except as set forth above,
the trustees will continue to hold office and may appoint successor trustees.
Meetings of the shareholders, shall be called by the trustees upon the written
request of shareholders owning at least 10% of the outstanding shares entitled
to vote.
PURCHASE, REDEMPTION AND PRICING OF SHARES
PURCHASE AND REDEMPTION INFORMATION
Purchases and redemptions are discussed in the Funds' Prospectus and
such information is incorporated herein by reference.
RETIREMENT PLANS. Shares of any of the Funds may be purchased in
connection with various types of tax deferred retirement plans, including
individual retirement accounts ("IRAs"), 401(k) plans, deferred compensation for
public schools and charitable organizations (403(b) plans) and simplified
employee pension IRAs (SEP-IRAs). An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.
IN-KIND PURCHASES. Payment for shares may, in the discretion of the
Sub-Adviser, be made in the form of securities that are permissible investments
for the Funds as described in the Prospectuses. For further information about
this form of payment please contact the Manager. In connection with an in-kind
securities payment, a Fund will require, among other things, that the securities
(a) meet the investment objectives and policies of the Funds; (b) are acquired
for investment and not for resale; (c) are liquid securities that are not
restricted as to transfer either by law or liquidity of markets; (d) have a
value that is readily ascertainable by a listing on a nationally recognized
securities exchange; and (e) are valued on the day of purchase in accordance
with the pricing methods used by the Fund and that the Fund receive satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other tax matters relating to the securities.
REDEMPTION IN-KIND. Redemption proceeds are normally paid in cash;
however, each Fund may pay the redemption price in whole or part by a
distribution in kind of securities from the portfolio of the particular Fund, in
lieu of cash, in conformity with applicable rules of the Securities and Exchange
Commission. If shares are redeemed in kind, the redeeming shareholder might
incur transaction costs in converting the assets into cash.
OTHER REDEMPTION INFORMATION. The Funds reserve the right to suspend or
postpone redemptions during any period when: (i) trading on the New York Stock
Exchange (the "NYSE") is restricted by applicable rules and regulations of the
Securities and Exchange Commission; (ii) the NYSE is closed for other than
customary weekend and holiday closings; (iii) the Securities and Exchange
Commission has by order permitted such suspension or postponement for the
protection of the shareholders; or (iv) an emergency, as determined by the
Securities and Exchange Commission, exists, making disposal of portfolio
securities or valuation of net assets of a Fund not reasonably practicable.
23
<PAGE>
The Funds may involuntarily redeem an investor's shares if the net
asset value of such shares is less than $10,000; provided that involuntary
redemptions will not result from fluctuations in the value of an investor's
shares. A notice of redemption, sent by first-class mail to the investor's
address of record, will fix a date not less than 60 days after the mailing date,
and shares will be redeemed at the net asset value at the close of business on
that date unless sufficient additional shares are purchased to bring the
aggregate account value up to $10,000 or more. A check for the redemption
proceeds payable to the investor will be mailed to the investor at the address
of record.
TAXES
The following summarizes certain additional federal and state income
tax considerations generally affecting the Funds and their shareholders that are
not described in the Funds' Prospectuses. No attempt is made to present a
detailed explanation of the tax treatment of the Funds or their shareholders,
and the discussion here and in the Prospectus is not intended as a substitute
for careful tax planning. This discussion is based upon present provisions of
the Code, the regulations promulgated thereunder, and judicial and
administrative ruling authorities, all of which are subject to change, which
change may be retroactive. Prospective investors should consult their own tax
advisors with regard to the federal tax consequences of the purchase, ownership
and disposition of Fund shares, as well as the tax consequences arising under
the laws of any state, foreign country, or other taxing jurisdiction.
TAX STATUS OF THE FUNDS
Each Fund intends to elect and qualify to be taxed separately as a
regulated investment company under the Code. As a regulated investment company,
each Fund generally is exempt from federal income tax on its net investment
income and realized capital gains which it distributes to shareholders, provided
that it distributes an amount equal to the sum of (a) at least 90% of its
investment company taxable income (net investment income and the excess of net
short-term capital gain over net long-term capital loss), if any, for the year
and (b) at least 90% of its net tax-exempt interest income, if any, for the year
(the "Distribution Requirement") and satisfies certain other requirements of the
Code that are described below. Distributions of investment company taxable
income and net tax-exempt interest income made during the taxable year or, under
specified circumstances, within twelve months after the close of the taxable
year will satisfy the Distribution Requirement.
In addition to satisfaction of the Distribution Requirement, each Fund
must derive with respect to a taxable year at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies (the "Income Requirement").
In addition to the foregoing requirements, at the close of each quarter
of its taxable year, at least 50% of the value of each Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer) and no more than 25% of the
value of each Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses.
If for any taxable year any Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders. In such
event, all distributions (whether or not derived from exempt-interest income)
would be taxable as ordinary income and would be eligible for the dividends
received deduction in the case of corporate shareholders to the extent of such
Fund's current and accumulated earnings and profits.
Although a Fund expects to qualify as a "regulated investment company"
and to be relieved of all or substantially all Federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, a Fund may be subject to
the tax laws of such states or localities.
24
<PAGE>
TAXATION OF FUND DISTRIBUTIONS
Distributions of net investment income received by a Fund from
investments in debt securities and any net realized short-term capital gains
distributed by a Fund will be taxable to shareholders as ordinary income and
will not be eligible for the dividends received deduction for corporations.
Each Fund intends to distribute to shareholders any excess of net
long-term capital gain over net short-term capital loss ("net capital gain") for
each taxable year. Such gain is distributed as a capital gain dividend and is
taxable to shareholders as gain from the sale or exchange of a capital asset
held for more than one year, regardless of the length of time a shareholder has
held his or her Fund shares and regardless of whether the distribution is paid
in cash or reinvested in shares. The Funds expect that capital gain dividends
will be taxable to shareholders as long-term gain. Capital gain dividends are
not eligible for the dividends received deduction.
In the case of corporate shareholders, distributions of a Fund for any
taxable year generally qualify for the dividends received deduction to the
extent of the gross amount of "qualifying dividends" received by such Fund for
the year and if certain holding period requirements are met. Generally, a
dividend will be treated as a "qualifying dividend" if it has been received from
a domestic corporation.
Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, a Fund must distribute during each
calendar year an amount equal to the sum of (1) at least 98% of its ordinary
income (not taking into account any capital gains or losses) for the calendar
year, (2) at least 98% of its capital gains in excess of its capital losses
(adjusted for certain ordinary losses, as prescribed by the Code) for the
one-year period ending on October 31 of the calendar year, and (3) any ordinary
income and capital gains for previous years that was not distributed during
those years. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by a Fund in October, November or
December with a record date in such a month and paid by a Fund during January of
the following calendar year. Such distributions will be taxable to shareholders
in the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. To prevent application of
the excise tax, a Fund intends to make its distributions in accordance with the
calendar year distribution requirement.
Shareholders will be advised annually as to the federal income tax
consequences of distributions made by the Funds each year.
DISPOSITION OF SHARES
Upon a redemption, sale or exchange of his or her shares, a shareholder
will realize a taxable gain or loss depending upon his or her basis in the
shares. Such gain or loss will be treated as capital gain or loss if the shares
are capital assets in the shareholder's hands and will be long-term or
short-term, generally, depending upon the shareholder's holding period for the
shares. Any loss realized on a redemption, sale or exchange will be disallowed
to the extent the shares disposed of are replaced (including through
reinvestment of dividends) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of Fund shares held by the shareholder for
six months or less will be treated as a long-term capital loss to the extent of
any distributions of net capital gains received or treated as having been
received by the shareholder with respect to such shares and treated as long-term
capital gains. Furthermore, a loss realized by a shareholder on the redemption,
sale or exchange of shares of a Fund with respect to which exempt-interest
dividends have been paid will, to the extent of such exempt-interest dividends,
be disallowed if such shares have been held by the shareholder for six months or
less.
INFORMATION RELATING TO FOREIGN INVESTMENTS
25
<PAGE>
Income received by a Fund from sources within foreign countries may be
subject to withholding and other foreign taxes. The payment of such taxes will
reduce the amount of dividends and distributions paid to the Funds'
shareholders. So long as a Fund qualifies as a regulated investment company,
certain distribution requirements are satisfied, and more than 50% of the value
of the Fund's assets at the close of the taxable year consists of securities of
foreign issuers, the Fund may elect, subject to limitation, to pass through its
foreign tax credits to its shareholders. The Fund may qualify for and make this
election in some, but not necessarily all, of its taxable years. If a Fund were
to make an election, an amount equal to the foreign income taxes paid by the
Fund would be included in the income of its shareholders and the shareholders
would be entitled to credit their portions of this amount against their U.S. tax
due, if any, or to deduct such portions from their U.S. taxable income, if any.
Shortly after any year for which it makes such an election, a Fund will report
to its shareholders, in writing, the amount per share of such foreign tax that
must be included in each shareholder's gross income and the amount which will be
available for deduction or credit. No deduction for foreign taxes may be claimed
by a shareholder who does not itemize deductions. Certain limitations are
imposed on the extent to which the credit (but not the deduction) for foreign
taxes may be claimed.
Shareholders who choose to utilize a credit (rather than a deduction)
for foreign taxes will be subject to limitations, including the restriction that
the credit may not exceed the shareholder's United States tax (determined
without regard to the availability of the credit) attributable to his or her
total foreign source taxable income. For this purpose, the portion of dividends
and distributions paid by the Fund from its foreign source income will be
treated as foreign source income. The Fund's gains and losses from the sale of
securities will generally be treated as derived from United States sources and
certain foreign currency gains and losses likewise will be treated as derived
from United States sources. The limitation on the foreign tax credit is applied
separately to foreign source "passive income", such as the portion of dividends
received from the Fund which qualifies as foreign source income. In addition,
only a portion of the foreign tax credit will be allowed to offset any
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of the foreign income taxes paid by the
Fund.
Certain Funds may invest in shares of foreign corporations that may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute passive assets, or 75% or more of its gross passive
income. If a Fund receives a so-called "excess distribution" with respect to
PFIC stock, the Fund itself may be subject to a tax on a portion of the excess
distribution, whether or not the corresponding income is distributed by the Fund
to shareholders. In general, under the PFIC rules, an excess distribution is
treated as having been realized ratably over the period during which the Fund
held the PFIC shares. Each Fund will itself be subject to tax on the portion, if
any, of an excess distribution that is so allocated to prior Fund taxable years
and an interest factor will be added to the tax, as if the tax had been payable
in such prior taxable years. Certain distributions from a PFIC as well as gain
from the sale of PFIC shares are treated as excess distributions. Excess
distributions are characterized as ordinary income even though, absent
application of the PFIC rules, certain excess distributions might have been
classified as capital gain.
The Funds may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis, regardless of whether
distributions were received from the PFIC in a given year. If this election were
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, another election would involve
marking to market the Fund's PFIC shares at the end of each taxable year, with
the result that unrealized gains would be treated as though they were realized
and reported as ordinary income. Any mark-to market losses and any loss from an
actual disposition of Fund shares would be deductible as ordinary losses to the
extent of any net mark-to-market gains included in income in prior years.
Income received by a Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries.
INFORMATION RELATING TO FUND INVESTMENTS
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<PAGE>
TAXATION OF CERTAIN FINANCIAL INSTRUMENTS. Special rules govern the
Federal income tax treatment of financial instruments that may be held by some
of the Funds. These rules may have a particular impact on the amount of income
or gain that the Funds must distribute to their respective shareholders to
comply with the Distribution Requirement and on the income or gain qualifying
under the Income Requirement.
ORIGINAL ISSUE DISCOUNT. The Funds may purchase debt securities with
original issue discount. Original issue discount represents the difference
between the original issue price of the debt instrument and the stated
redemption price at maturity. Original issue discount is required to be accreted
on a daily basis and is considered interest income for federal income tax
purposes and, therefore, such income would be subject to the distribution
requirements applicable to regulated investment companies.
MARKET DISCOUNT. The Funds may purchase debt securities at a discount
in excess of the original issue discount, or at a discount to the stated
redemption price at maturity (for debt securities without original issue
discount). This discount is called "market discount". Market discount is
permitted to be recorded daily or at time of disposition of the debt security.
If market discount is to be recognized at time of disposition of the debt
security, accrued market discount is recognized to the extent of gain on the
disposition of the debt security.
HEDGING TRANSACTIONS. The taxation of equity options and
over-the-counter options on debt securities is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Any regulated futures and foreign currency contracts and certain
options (namely, nonequity options and dealer equity options) in which a Fund
may invest may be "section 1256 contracts." Gains or losses on section 1256
contracts are generally considered 60% long-term and 40% short-term capital
gains or losses; however, foreign currency gains or losses arising from certain
section 1256 contracts may be treated as ordinary income or loss. Also, section,
1256 contracts held by a Fund at the end of each taxable year (and generally for
purposes of the 4% excise tax, on October 31 of each year) are
"marked-to-market" with the result that unrealized gains or losses are treated
as though they were realized.
Generally, hedging transactions, if any, undertaken by a Fund may
result in "straddles" for U.S. federal income tax purposes. The straddle rules
may affect the character of gains (or losses) realized by the Funds. In
addition, losses realized by a Fund on positions that are part of a straddle may
be deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of hedging transactions to the Funds are
not entirely clear. The hedging transactions may increase the amount of
short-term capital gain realized by the Funds which is taxed as ordinary income
when distributed to shareholders.
The Funds may make one or more of the elections available under the
Code which are applicable to straddles. If a Fund makes any of the elections,
the amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
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<PAGE>
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
The diversification requirements applicable to the Funds' assets may
limit the extent to which the Funds will be able to engage in transactions in
options, futures or forward contracts.
CONSTRUCTIVE SALES. Recently enacted rules may affect the timing and
character of gain if a Fund engages in transactions that reduce or eliminate its
risk of loss with respect to appreciated financial positions. If the Fund enters
into certain transactions in property while holding substantially identical
property, the Fund would be treated as if it had sold and immediately
repurchased the property and would be taxed on any gain (but not loss) from the
constructive sale. The character of gain from a constructive sale would depend
upon the Fund's holding period in the property. Loss from a constructive sale
would be recognized when the property was subsequently disposed of, and its
character would depend on the Fund's holding period and the application of
various loss deferral provisions of the Code.
CURRENCY FLUCTUATIONS - "SECTION 988" GAINS OR LOSSES. Under the Code,
gains or losses attributable to fluctuations in exchange rates which occur
between the time a Fund accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually collects such receivables or
pays such liabilities generally are treated as ordinary income and loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain futures, forward contracts and options, gains or
losses attributable to fluctuations in the value of the foreign currency between
the date of acquisition of the security or contract and the date of disposition
also may be treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "Section 988" gains or losses, may increase or decrease the
amount of a Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
BACKUP WITHHOLDING
The Trust will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable distributions, including gross
proceeds realized upon sale or other dispositions paid to any shareholder (i)
who has provided an incorrect tax identification number or no number at all,
(ii) who is subject to backup withholding by the Internal Revenue Service for
failure to report the receipt of taxable interest or dividend income properly,
or (iii) who has failed to certify that he is not subject to backup withholding
or that he is an "exempt recipient."
OTHER TAXATION
The foregoing discussion relates only to U.S. federal income tax law
and certain state taxes as applicable to U.S. persons (i.e., U.S. citizens and
residents and domestic corporations, partnerships, trusts and estates).
Distributions by the Funds, and dispositions of Fund shares also may be subject
to other state and local taxes, and their treatment under state and local income
tax laws may differ from the U.S. federal income tax treatment. Shareholders
should consult their tax advisers with respect to particular questions of U.S.
federal, state and local taxation. Shareholders who are not U.S. persons should
consult their tax advisers regarding U.S. and foreign tax consequences of
ownership of shares of the Fund, including the likelihood that distributions to
them would be subject to withholding of U.S. federal income tax at a rate of 30%
(or at a lower rate under a tax treaty). Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.
PERFORMANCE INFORMATION
The 30-day (or one month) standard yield is calculated for the Fixed
Income Fund in accordance with the method prescribed by the SEC for mutual
funds:
6
YIELD = 2 [( a-b + 1) - 1]
---
cd
28
<PAGE>
Where:
a = dividends and interest earned by the Fund during the period;
b = expenses accrued for the period (net of reimbursements and
waivers);
c = average daily number of shares outstanding during the period
entitled to receive dividends;
d = maximum offering price per share on the last day of the period.
For the purpose of determining interest earned on debt obligations
purchased by the Fund at a discount or premium (variable "a" in the formula),
the Fund computes the yield to maturity of such instrument based on the market
value of the obligation (including actual accrued interest) at the close of
business on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by the Fund, dividend
income is recognized by accruing 1/360 of the stated dividend rate of the
security for each day that the security is held by the Fund.
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt obligations that are issued with original
issue discount but which have the discounts based on current market value that
are less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by the Fund to all shareholder accounts in proportion to the length of
the base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula).
TOTAL RETURN
Each Fund that advertises its "average annual total return" computes
such return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:
n
P (1 + T) = ERV
29
<PAGE>
Where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year (or other) periods at the end of
the applicable period (or a fractional portion thereof)
P = hypothetical initial payment of $1,000
n = period covered by the computation, expressed in years.
Each Fund that advertises its "aggregate total return" computes such
returns by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment.
The calculations are made assuming that (1) all dividends and capital
gain distributions are reinvested on the reinvestment dates at the price per
share existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value is determined by assuming
complete redemption of the hypothetical investment after deduction of all
non-recurring charges at the end of the measuring period.
The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.
From time to time, in advertisements or in reports to shareholders, a
Fund's yield or total return may be quoted and compared to those of other mutual
funds with similar investment objectives and to stock or other relevant indices.
FINANCIAL STATEMENTS
The Financial Statements for the Trust at _______, 1999 including the
notes thereto and the report of PricewaterhouseCoopers LLP thereon are contained
in this SAI on the following pages.
<PAGE>
PART C: OTHER INFORMATION
<TABLE>
<CAPTION>
ITEM 23. EXHIBITS
<S> <C>
(a) (i) Declaration of Trust*
(ii) Amendment No. 1 to the Declaration of Trust**
(b) By-laws*
(c) Not Applicable
(d) (i) Investment Advisory and Administrative Services Agreement
with RWB Advisory Services Inc.**
(ii) Investment Sub-Advisory Agreement with Dimensional Fund Advisors, Inc.**
(e) Form of Distribution Agreement with RWB Securities Inc.
(f) Not Applicable
(g) Form of Custodian Agreement with State Street Bank and Trust Company ("State Street")
(h) (i) Form of Sub-Administration Agreement with State Street
(ii) Form of Transfer Agency and Service Agreement with State Street
(iii) Form of Shareholder Servicing Agreement
(i) Opinion and Consent of Paul, Hastings, Janovsky & Walker LLP**
(j) (i) Consent of PricewaterhouseCoopers, LLP**
(ii) Opinion of PricewaterhouseCoopers, LLP**
(k) Not Applicable
(l) Form of Initial Capital Agreement
(m) Not Applicable
(n) Not Applicable
(o) Multi-Class Plan**
(p) Powers of Attorney
</TABLE>
- -------------------------------
* Incorporated herein by reference from the Registrant's Initial Registration
Statement on Form N-1A (File nos. 333-70423, 811-09195) as filed with the U.S.
Securities and Exchange Commission on January 11, 1999.
** To be filed by amendment.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Not applicable.
ITEM 25. INDEMNIFICATION
Indemnification of Registrant's principal underwriter against certain
losses is provided for in the Distribution Agreement incorporated herein by
reference to Exhibit [e] hereto.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant, Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such
<PAGE>
liabilities (other than the payment by Registrant of expenses incurred or paid
by a trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Trustees shall not be responsible or liable in any event for any
neglect or wrong-doing of any officer, agent, employee, Investment Adviser or
principal underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, and the Trust out of its assets shall
indemnify and hold harmless each and every Trustee from and against any and all
claims, demands and expenses (including reasonable attorneys' fees) whatsoever
arising out of or related to each Trustee's performance of his or her duties as
a Trustee of the Trust; provided that nothing herein contained shall indemnify,
hold harmless or protect any Trustee from or against any liability to the Trust
or any Shareholder to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.
Every note, bond, instrument, certificate or undertaking and every other
act or thing whatsoever issued, executed or done by or on behalf of the Trust or
the Trustees or any of them in connection with the Trust shall be conclusively
deemed to have been issued, executed or done only in or with respect to their or
his or her capacity as Trustees or Trustee, and such Trustees or Trustee shall
not be personally liable thereon.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
RWB Advisory Services Inc. performs investment advisory services for Registrant
and institutional and individual investors.
Dimensional Fund Advisors Inc. performs investment advisory services for
Registrant and other investment companies and institutional and individual
investors.
See the information concerning RWB Advisory Services Inc. and Dimensional Fund
Advisors Inc. set forth in Parts A and B of this Registration Statement.
RWB Advisory Services Inc. and Dimensional Fund Advisors Inc. are both
investment advisers registered under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"). The list required by this Item 26 of directors,
officers or partners of RWB Advisory Services Inc. and Dimensional Fund Advisors
Inc., together with any information as to any business profession, vocation or
employment of a substantial nature engaged in by such directors, officers or
partners during the past two years, is incorporated herein by reference from
Schedules B and D of Forms ADV filed by RWB Advisory Services Inc. and
Dimensional Fund Advisors Inc. pursuant to the Advisers Act (SEC File Nos.
801-55934 and 801-16283).
<PAGE>
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Not Applicable
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
UNDERWRITER WITH FUND
<S> <C> <C>
John J. Bowen, Jr.
RWB Securities Inc. Chief Executive Officer, Chief Executive Officer,
1190 Saratoga Avenue Registered Principal and President and Trustee
Suite 200 President
San Jose, CA 95129
</TABLE>
(c) Not Applicable
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The following entities prepare, maintain and preserve the records required by
Section 31(a) of the 1940 Act for the Registrant. These services are provided to
the Registrant through written agreements between the parties to the effect that
such records will be maintained on behalf of the Registrant for the periods
prescribed by the rules and regulations of the Commission under the 1940 Act and
that such records are the property of the entity required to maintain and
preserve such records and will be surrendered promptly on request:
(1) RWB Advisory Services Inc.
1190 Saratoga Avenue, Suite 200
San Jose, California 95129
(2) Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
(3) State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(4) Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, Massachusetts 02171
ITEM 29. MANAGEMENT SERVICES
Not Applicable.
ITEM 30. UNDERTAKING
Not Applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this amendment to the registration statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Quincy and the Commonwealth of
Massachusetts, on the 9th day of June, 1999.
SA FUNDS - INVESTMENT TRUST
By: * /s/ John J. Bowen, Jr.
------------------------
John J. Bowen, Jr. *
President and Chief Executive Officer
* By: /s/ Cynthia Surprise
--------------------
Cynthia Surprise
As Attorney-in-Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed below by the
following person in the capacities and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ---------- ----- ----
<S> <C> <C>
* /s/ John J. Bowen, Jr. Trustee June 9, 1999
- -------------------------
John J. Bowen, Jr.
* /s/ Bryan W. Brown Trustee June 9, 1999
- -------------------------
Bryan W. Brown
* /s/ David G. Booth Trustee June 9, 1999
- -------------------------
David G. Booth
* /s/ Patrick Keating Trustee June 9, 1999
- -------------------------
Patrick Keating
* /s/ Harold M. Shefrin Trustee June 9, 1999
- -------------------------
Harold M. Shefrin
* /s/ Michael Clinton Treasurer and Chief June 9, 1999
- ------------------------- Financial and Accounting Officer
Michael Clinton
*By: /s/ Cynthia Surprise
--------------------
Cynthia Surprise
As Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
23 (e) Form of Distribution Agreement with RWB Securities Inc.
23 (g) Form of Custodian Agreement with State Street Bank and Trust Company ("State Street")
23 (h) (i) Form of Sub-Administration Agreement with State Street
23 (h) (ii) Form of Transfer Agency and Service Agreement with State Street
23 (h) (iii) Form of Shareholder Servicing Agreement
23 (l) Form of Initial Capital Agreement
23 (p) Powers of Attorney
</TABLE>
<PAGE>
Exhibit 23(e)
SA FUNDS - INVESTMENT TRUST
DISTRIBUTION AGREEMENT
Distribution Agreement made this ___ day of ____ 1999, by and between SA
Funds - Investment Trust, a Delaware business trust (the "Trust"), and RWB
Securities Inc., a Maryland corporation (the "Distributor").
WHEREAS, the Trust is a registered open-end management investment company
organized as a series trust offering a number of portfolios of securities (each,
a "Fund"), having filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-1A under the Securities Act of
1933 (the "1933 Act") and the Investment Company Act of 1940, as amended;
WHEREAS, the Trust desires to retain the Distributor to act as the
distributor with respect to the issuance and distribution of units of beneficial
interest ("Shares") of each Fund;
WHEREAS, the Distributor is a registered broker-dealer under the Securities
Exchange Act of 1934 (the "1934 Act") and a member of the National Association
of Securities Dealers ("NASD"); and
WHEREAS, the Distributor desires to provide such services to the Trust;
NOW THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Distributor as the exclusive
distributor for Shares of each Fund listed in Annex I hereto, as may be amended
by the parties from time to time, on the terms and for the period set forth in
this Agreement and subject to the registration requirements of the 1933 Act and
of the laws governing the sale of securities in the various states, and the
Distributor hereby accepts such appointment and agrees to act in such capacity
hereunder.
2. DEFINITIONS. Wherever they are used herein, the following terms have the
following respective meanings:
a. "1940 Act" means the Investment Company Act of 1940 and the rules and
regulations thereunder as amended from time to time;
b. "Prospectus" means the Prospectus and Statement of Additional
Information constituting parts of the Registration Statement of the Trust under
the 1933 Act as such Prospectus and Statement of Additional Information may be
amended or supplemented and filed with the Commission from time to time;
c. "Registration Statement" means the registration statement most
recently filed from time to time by the Trust with the Commission and effective
under the 1933 Act and the 1940 Act, as such registration statement is amended
by any amendments thereto at the time in effect.
3. DUTIES OF THE DISTRIBUTOR.
(a) The Trust grants to the Distributor the exclusive right to accept or
reject all orders for purchases of Shares of each Fund. The Distributor shall
issue or cause the Trust's transfer agent or
<PAGE>
shareholder service agent to issue confirmations of all accepted purchase orders
and to transmit a copy of such confirmations to the Trust. The Trust
acknowledges that the Distributor shall not be obligated to accept any certain
number of orders for Shares and nothing herein shall prevent the Distributor
from entering into like distribution arrangements with other investment
companies.
(b) The Distributor agrees to act as agent of the Trust with respect to
the distribution of Shares of each Fund as set forth in the Registration
Statement and in accordance with the provisions thereof.
(c) (i) The Distributor agrees to use its best efforts to encourage and
promote the sale of Shares of the Funds.
(ii) The Distributor shall, at its own expense, execute selected
dealer agreements ("Selected Dealer Agreements") with registered
broker-dealers and other eligible entities providing for the purchase of
Shares of the Funds in the form and as approved by the Board of Trustees
of the Trust, providing for activities which the Distributor deems
reasonable and appropriate and which are primarily intended to result in
the sale of such Shares. Pursuant to this Agreement, the Distributor
shall facilitate the coordination of the performance of any marketing
and promotional services, including advertising; the development and
implementation of any marketing plan; and clearing and filing all
advertising, sales, marketing and promotional materials of the Funds
with the NASD.
(d) All activities by the Distributor and its agents and employees which
are primarily intended to result in the sale of Shares shall comply with the
Registration Statement and Prospectus, the instructions of the Board of Trustees
of the Trust and all applicable laws, rules and regulations including, without
limitation, all rules and regulations made or adopted pursuant to the 1940 Act
by the Commission or any securities association registered under the 1934 Act,
including the NASD.
(e) Except as otherwise noted in the Registration Statement and
Prospectus, the offering price for all Shares will be the net asset value of the
Shares of the relevant Fund, as determined in the manner described in the
Registration Statement and Prospectus.
(f) If and whenever the determination of net asset value is suspended and
until such suspension is terminated, no further orders for Shares will be
accepted by the Distributor. In addition, the Trust reserves the right to
suspend sales and Distributor's authority to accept orders for Shares on behalf
of the Trust if, in the judgment of the Trust, it is in the best interests of
the Trust to do so. Suspension will continue for such period as may be
determined by the Trust.
(g) The Distributor is not authorized by the Trust to give any information
or to make any representations other than those contained in the Registration
Statement or Prospectus or contained in shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use.
The Distributor shall be entitled to rely on and shall not be responsible in any
way for information provided to it by the Trust and its respective service
providers and shall not be liable or responsible for the errors and omissions of
such service providers, provided that the foregoing shall not be construed to
protect the Distributor against any liability to the Trust or the Trust's
shareholders to which the Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement.
2
<PAGE>
(h) The Board of Trustees shall approve the form of any Soliciting Dealer
Agreement to be entered into by the Distributor.
(i) The Distributor shall ensure that all direct requests for Prospectuses
and Statements of Additional of Information are fulfilled.
(j) The Distributor agrees to make available, at the Trust's request, one
or more members of its staff to attend Board meetings of the Trust in order to
provide information with regard to the ongoing distribution process and for such
other purposes as may be requested by the Board of Trustees of the Trust.
4. DUTIES OF THE TRUST.
(a) The Trust agrees that it will take all action necessary to register an
indefinite number of shares under the 1933 Act. The Trust will make available
to the Distributor such number of copies of its then currently effective
Prospectus as the Distributor may reasonably request. The Trust will furnish to
the Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use in connection with the
distribution of Shares. The Trust shall keep the Distributor informed of the
jurisdictions in which the Trust has effected notice filings of shares of the
Trust for sale under the securities laws thereof.
(b) The Trust represents to the Distributor that the Registration
Statement and Prospectus filed by the Trust with the Commission with respect to
the Trust have been prepared in conformity with the requirements of the 1933
Act, the 1940 Act and the rules and regulations of the Commission thereunder.
The Trust will notify the Distributor promptly of any amendment to the
Registration Statement or supplement to the Prospectus and any stop order
suspending the effectiveness of the Registration Statement.
5. EXPENSES.
(a) The Distributor will bear the following costs and expenses relating to
the distribution of Shares of the Funds: (a) the costs of processing and
maintaining records of purchases of Shares; (b) the costs of maintaining the
records required of a broker-dealer registered under the 1934 Act; (c) the
expenses of maintaining its registration or qualification as a dealer or broker
under federal or state laws; (d) the expenses incurred by the Distributor in
connection with normal (non-expedited) NASD filing fees; (e) the cost of
printing and mailing of the Prospectus (other then those furnished to existing
shareholders) and any sales literature used by the Distributor; and (f) all
other expenses incurred in connection with the distribution services
contemplated herein, except as specifically provided in this Agreement.
6. INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless the Distributor and
any soliciting dealer that enters into a Soliciting Dealer Agreement with the
Distributor, which provides for such indemnification, in the form approved by
the Board of Trustees (each an "Indemnified Dealer") and each of the directors,
officers, agents and employees and any person who controls the Distributor or
the Indemnified Dealer within the meaning of Section 15 of the 1933 Act (any of
the Distributor, any Indemnified Dealer, their officers, agents, employees and
directors or such control persons, for purposes of this paragraph, an
"Indemnitee") against any loss, liability, claim, damages or expense (including
the
3
<PAGE>
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith) arising out of or based upon the claim that the Registration
Statement, Prospectus, shareholder reports or other information filed or made
public by the Trust (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements not misleading under the 1933 Act, or
any other statute or the common law. However, the Trust does not agree to
indemnify the Distributor or hold it harmless to the extent that the statement
or omission was made in reliance upon, and in conformity with information
furnished to the Trust by or on behalf of the Distributor. The Trust will also
not indemnify any Indemnitee with respect to any untrue statement or omission
made in the Registration Statement or Prospectus that is subsequently corrected
in such document (or an amendment thereof or supplement thereto) if a copy of
the Prospectus (or such amendment or supplement) was not sent or given to the
person asserting any such loss, liability, claim, damage or expense at or before
the written confirmation to such person in any case where such delivery is
required by the 1933 Act and the Trust had notified the Distributor of the
amendment or supplement prior to the sending of the confirmation. In no case
(i) is the indemnity of the Trust in favor of any Indemnitee to be deemed to
protect the Indemnitee against any liability to the Trust or its shareholders to
which the Indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against any
Indemnitee unless the Indemnitee shall have notified the Trust in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon Indemnitee (or after Indemnitee shall have received notice of
service on any designated agent). However, failure to notify the Trust of any
claim shall not relieve the Trust from any liability which it may have to any
Indemnitee against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Trust shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any claims, but if the Trust elects
to assume the defense, the defense shall be conducted by counsel chosen by it
and satsfactory to Indemnitee, defendant or defendants in the suit. In the
event the Trust elects to assume the defense of any suit and retain counsel,
Indemnitee, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Trust does not
elect to assume the defense of any suit, it will reimburse the Indemnitee,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Trust agrees to notify the Distributor and any
Indemnified Dealer promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the issuance or
sale of any of the Shares.
(b) The Distributor agrees to indemnify and hold harmless the Trust and
each of its Trustees and officers and any person who controls the Trust within
the meaning of Section 15 of the 1933 Act (for purposes of this paragraph, the
Trust and each of its Trustees and officers and its controlling persons are
collectively referred to as the "Trust Affiliates") against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith) which the Trust Affiliate may
incur under the 1933 Act or any other statute or common law, but only to the
extent that such loss, liability, claim, damages or expense shall arise out of
or be based upon (i) the allegation of any wrongful act of the Distributor or
any of its employees or (ii) allegation that the Registration Statement,
Prospectus, shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements not misleading, insofar as the statement or
omission was made in reliance upon, and in conformity with information furnished
to the Trust by or on
4
<PAGE>
behalf of the Distributor. In no case (i) is the indemnity of the Distributor
in favor of any Trust Affiliate to be deemed to protect any Trust Affiliate
against any liability to the Trust or its security holders to which such Trust
Affiliate would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against any Trust Affiliate unless the
Trust Affiliate shall have notified the Distributor in writing of the claim
within a reasonable time after the summons or the first written notification
giving information of the nature of the claim shall have been served upon the
Trust Affiliate (or after the Trust Affiliate shall have received notice of
service on any designated agent). However, failure to notify the Distributor of
any claim shall not relieve the Distributor from any liability which it may have
to the Trust Affiliate against whom the action is brought otherwise than on
account of its indemnity agreement contained in this paragraph. The Distributor
shall be entitled to participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce the claim, but if
the Distributor elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Trust, its officers and Board and
to any controlling person or persons, defendant or defendants in the suit. In
the event that Distributor elects to assume the defense of any suit and retain
counsel, the Trust or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Trust, its officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify the
Trust promptly of the commencement of any litigation or proceedings against it
in connection with the issuance and sale of any of the Shares.
(c) No indemnified party shall settle any claim against it for which it
intends to seek indemnification from the indemnifying party, under the terms of
section 6(a) or 6(b) above, without the prior written notice to and consent from
the indemnifying party, which consent shall not be unreasonably withheld. No
indemnified or indemnifying party shall settle any claim unless the settlement
contains a full release of liability with respect to the other party in respect
of such action. This section 6 shall survive the termination of this Agreement.
7. REPRESENTATIONS.
(a) The Distributor represents and warrants that (i) it is duly organized
as a [ ]corporation and is and at all times will remain duly authorized and
licensed to carry out its services as contemplated herein; (ii) the execution,
delivery and performance of this Agreement are within its power and have been
duly authorized by all necessary action; and (iii) its entering into this
Agreement or providing the services contemplated hereby does not conflict with
or constitute a default or require a consent under or breach of any provision of
any agreement or document to which the Distributor is a party or by which it is
bound.
(b) The Trust represents and warrants that (i) it is duly organized as a
Delaware business trust and is and at all times will remain duly authorized to
carry out its obligations as contemplated herein; (ii) the execution, delivery
and performance of this Agreement are within its power and have been duly
authorized by all necessary action; and (iii) its entering into this Agreement
does not conflict with or constitute a default or require a consent under or
breach of any provision of any agreement or document to which the Trust is a
party or by which it is bound.
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8. DURATION, TERMINATION AND AMENDMENT.
(a) This agreement shall become effective on the effective date of the
Registration Statement and unless terminated as provided herein, shall continue
for two years from its effective date, and thereafter from year to year,
provided such continuance is approved annually by the vote of a majority of the
Board of Trustees, and by the vote of those Trustees who are not "interested
persons" of the Trust (the "Independent Trustees"), cast in person at a meeting
called for the purpose of voting on the approval. This Agreement may be
terminated at any time, without the payment of any penalty, as to each Fund (i)
by vote of a majority of the Independent Trustees or (ii) by vote of a majority
(as defined in the 1940 Act) of the outstanding voting securities of the Fund,
on at least sixty (60) days prior written notice to the Distributor. In
addition, this Agreement may be terminated at any time by the Distributor upon
at least sixty (60) days prior written notice to the Trust. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph, the terms "assignment" and "interested persons" shall have the
respective meanings specified in the 1940 Act.
(b) No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
9. NOTICE. Any notice or other communication authorized or required by this
Agreement to be given to either party shall be in writing and deemed to have
been given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other): if to the
Distributor: RWB Securities Inc., 1190 Saratoga Avenue, Suite 200, San Jose,
California 95120; if to the Trust: RWB Funds, 1190 Saratoga Avenue, Suite 200,
San Jose, California 95120.
10. CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, without giving effect to
the choice of laws provisions thereof.
11. COUNTERPARTIES. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. SEVERABILITY. If any provisions of this Agreement shall be held or made
invalid, in whole or in part, then the other provisions of this Agreement shall
remain in force. Invalid provisions shall, in accordance with this Agreement's
intent and purpose, be amended, to the extent legally possible, by valid
provisions in order to effectuate the intended results of the invalid
provisions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first set forth
above.
SA FUNDS - INVESTMENT TRUST
By:
---------------------------
Name:
-------------------------
Title:
------------------------
RWB SECURITIES INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
7
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ANNEX I
SA Fixed Income Fund - Class S Shares
SA U.S. Market Fund - Class S Shares
SA U.S. HBtM Fund - Class S Shares
SA U.S. Small Fund - Class S Shares
SA International HBtM Fund - Class S Shares
SA International Small Fund Class S Shares
SA Fixed Income Fund - Class I Shares
SA U.S. Fund - Class I Shares
SA U.S. HBtM Fund - Class I Shares
SA U.S. Small Fund - Class I Shares
SA International HBtM Fund - Class I Shares
SA International Small Fund - Class I Shares
As of ____________, 1999
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CUSTODIAN AGREEMENT
This Agreement between RWB FUNDS - INVESTMENT TRUST a business trust
organized and existing under the laws of Delaware (the "FUND"), and STATE
STREET BANK and TRUST COMPANY, a Massachusetts trust company (the
"CUSTODIAN"),
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends that this Agreement be applicable to six series:
RWB U.S. Bond Fund, U.S. Total Market Fund, U.S. High Book to Market Fund,
U.S. Small Companies Fund, International High Book to Market Fund and
International Small Company Fund (such series together with all other series
subsequently established by the Fund and made subject to this Agreement in
accordance with Section 18, be referred to herein as the "PORTFOLIO(S)");
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of the assets
of the Portfolios of the Fund, including securities which the Fund, on behalf
of the applicable Portfolio desires to be held in places within the United
States ("DOMESTIC SECURITIES") and securities it desires to be held outside
the United States ("FOREIGN SECURITIES"). The Fund on behalf of the
Portfolio(s) agrees to deliver to the Custodian all securities and cash of
the Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it for
such new or treasury shares of beneficial interest of the Fund representing
interests in the Portfolios ("SHARES") as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Portfolio and not delivered to the Custodian. With
respect to uncertificated shares (the "UNDERLYING SHARES") of registered
"investment companies" (as defined in Section 3(a)(1) of the Investment
Company Act of 1940, as amended (the "1940 ACT"), whether in the same "group
of investment companies" (as defined in Section 12(d)(1)(G)(ii) of the 1940
Act) or otherwise, including, pursuant to Section 12(d)(1)(F) of the 1940 Act
(hereinafter sometimes referred to as the "UNDERLYING PORTFOLIOS"), the
holding of confirmation statements that identify the shares as being recorded
in the Custodian's name on behalf of the Portfolios will be deemed custody
for purposes hereof.
<PAGE>
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in
Section 6 hereof), the Custodian shall on behalf of the applicable
Portfolio(s) from time to time employ one or more sub-custodians located in
the United States, but only in accordance with an applicable vote by the
Board of Trustees of the Fund (the "BOARD") on behalf of the applicable
Portfolio(s), and provided that the Custodian shall have no more or less
responsibility or liability to the Fund on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian. The Custodian may employ as sub-custodian for the Fund's
foreign securities on behalf of the applicable Portfolio(s) the foreign
banking institutions and foreign securities depositories designated in
Schedules A and B hereto but only in accordance with the applicable
provisions of Sections 3 and 4.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
FUND HELD BY THE CUSTODIAN IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and
physically segregate for the account of each Portfolio all non-cash property,
to be held by it in the United States including all domestic securities owned
by such Portfolio, other than (a) securities which are maintained pursuant to
Section 2.8 in a clearing agency which acts as a securities depository or in
a book-entry system authorized by the U.S. Department of the Treasury (each,
a "U.S. SECURITIES SYSTEM") and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent ("DIRECT
PAPER") which is deposited and/or maintained in the Direct Paper System of
the Custodian (the "DIRECT PAPER SYSTEM") pursuant to Section 2.9; and (c)
the Underlying Shares owned by the Fund which are maintained pursuant to
Section 2.10A in an account with State Street Bank and Trust Company or such
other entity which may from time to time act as a transfer agent for the
Underlying Portfolios and with respect to which the Custodian is provided
with Proper Instructions (the "UNDERLYING TRANSFER AGENT").
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the Custodian or in
a U.S. Securities System account of the Custodian or in the Custodian's
Direct Paper book entry system account ("DIRECT PAPER SYSTEM ACCOUNT") or in
an account at the Underlying Transfer Agent, only upon receipt of Proper
Instructions on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, and only in the
following cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Portfolio;
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3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.8
hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.7 or into the name
or nominee name of any sub-custodian appointed pursuant to
Section 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, BUT ONLY against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by
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<PAGE>
the U.S. Department of the Treasury, the Custodian will not
be held liable or responsible for the delivery of securities
owned by the Portfolio prior to the receipt of such
collateral;
11) For delivery as security in connection with any borrowing by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, BUT ONLY
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "EXCHANGE ACT") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a futures commission merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission ("CFTC")
and/or any contract market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent for the
Fund (the "TRANSFER AGENT") for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund related to the Portfolio
(the "PROSPECTUS"), in satisfaction of requests by holders of
Shares for repurchase or redemption;
15) In the case of a sale processed through the Underlying
Transfer Agent of Underlying Shares, in accordance with
Section 2.10A hereof; and
16) For any other proper purpose, BUT ONLY upon receipt of Proper
Instructions from the Fund on behalf of the applicable
Portfolio specifying the securities of the Portfolio to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper trust
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any
4
<PAGE>
nominee of the Fund on behalf of the Portfolio or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Portfolio,
UNLESS the Fund has authorized in writing the appointment of a nominee to be
used in common with other registered investment companies having the same
investment adviser as the Portfolio, or in the name or nominee name of any
agent appointed pursuant to Section 2.7 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All securities accepted by the
Custodian on behalf of the Portfolio under the terms of this Agreement shall
be in "street name" or other good delivery form. If, however, the Fund
directs the Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.
SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of each
Portfolio of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Portfolio, other than cash maintained by the Portfolio
in a bank account established and used in accordance with Rule 17f-3 under
the 1940 Act. Funds held by the Custodian for a Portfolio may be deposited by
it to its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; PROVIDED, however, that every such bank or trust
company shall be qualified to act as a custodian under the 1940 Act and that
each such bank or trust company and the funds to be deposited with each such
bank or trust company shall on behalf of each applicable Portfolio be
approved by vote of a majority of the Board. Such funds shall be deposited by
the Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of
Section 2.3, the Custodian shall collect on a timely basis all income and
other payments with respect to registered domestic securities held hereunder
to which each Portfolio shall be entitled either by law or pursuant to custom
in the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the date
of payment by the issuer, such securities are held by the Custodian or its
agent thereof and shall credit such income, as collected, to such Portfolio's
custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due each Portfolio on
securities loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty or responsibility
in connection therewith, other than to provide the Fund with such information
or data as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is properly
entitled.
5
<PAGE>
SECTION 2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper
Instructions on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall pay
out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act
to act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 2.8 hereof; (c) in the case of a purchase of
Underlying Shares, in accordance with the conditions set forth
in Section 2.10A hereof; (d) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.9; (e) in the case of
repurchase agreements entered into between the Fund on behalf
of the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery
of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Portfolio or (f) for transfer to a time deposit account of
the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined herein;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued as set
forth in Section 5 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared
pursuant to the governing documents of the Fund;
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<PAGE>
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of Proper
Instructions from the Fund on behalf of the Portfolio
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper trust purpose, and naming the person or
persons to whom such payment is to be made.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this Section 2
as the Custodian may from time to time direct; PROVIDED, HOWEVER, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder. The Underlying Transfer Agent
shall not be deemed an agent or subcustodian of the Custodian for purposes of
this Section 2.7 or any other provision of this Agreement.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS.
The Custodian may deposit and/or maintain securities owned by a Portfolio in
a U.S. Securities System subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are
represented in an account of the Custodian in the U.S.
Securities System (the "U.S. SECURITIES SYSTEM ACCOUNT") which
account shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System
shall identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the U.S. Securities System Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the
Portfolio. The Custodian shall transfer securities sold for
the account of the Portfolio upon (i) receipt of advice from
the U.S. Securities System that payment for such securities
has been transferred to the U.S. Securities System Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Portfolio. Copies of all advices from the U.S.
Securities System of transfers of securities for the account
of the Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the
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Custodian and be provided to the Fund at its request. Upon
request, the Custodian shall furnish the Fund on behalf
of the Portfolio confirmation of each transfer to or from
the account of the Portfolio in the form of a written
advice or notice and shall furnish to the Fund on behalf
of the Portfolio copies of daily transaction sheets
reflecting each day's transactions in the U.S. Securities
System for the account of the Portfolio;
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System;
5) [Reserved.];
6) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the U.S. Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the U.S.
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Portfolio has not been made whole for any such loss or damage.
SECTION 2.9 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM.
The Custodian may deposit and/or maintain securities owned by a Portfolio in
the Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
the Direct Paper System Account, which account shall not
include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to the
Portfolio;
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4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for
the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio, in the form of a written advice or notice,
of Direct Paper on the next business day following such
transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Direct Paper System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.
SECTION 2.10 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio establish and
maintain a segregated account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD (or
any futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and
of any registered national securities exchange (or the CFTC or any registered
contract market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Portfolio or
commodity futures contracts or options thereon purchased or sold by the
Portfolio, (iii) for the purposes of compliance by the Portfolio with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release of the SEC, or interpretative opinion of the staff of the
SEC, relating to the maintenance of segregated accounts by registered
investment companies and (iv) for other proper trust purposes, BUT ONLY, in
the case of clause (iv), upon receipt of Proper Instructions from the Fund on
behalf of the applicable Portfolio, setting forth the purpose or purposes of
such segregated account and declaring such purpose(s) to be a proper trust
purpose.
SECTION 2.10A DEPOSIT OF FUND ASSETS WITH THE UNDERLYING TRANSFER
AGENT. Underlying Shares shall be deposited and/or maintained in an account
or accounts maintained with the Underlying Transfer Agent. The Underlying
Transfer Agent shall be deemed to be
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acting as if it is a "securities depository" for purposes of Rule 17f-4 under
the 1940 Act. The Fund hereby directs the Custodian to deposit and/or
maintain such securities with the Underlying Transfer Agent, subject to the
following provisions:
1) The Custodian shall keep Underlying Shares owned by a
Portfolio with the Underlying Transfer Agent provided that
such securities are maintained in an account or accounts on
the books and records of the Underlying Transfer Agent in the
name of the Custodian as custodian for the Portfolio.
2) The records of the Custodian with respect to Underlying Shares
which are maintained with the Underlying Transfer Agent shall
identify by book-entry those Underlying Shares belonging to
each Portfolio;
3) The Custodian shall pay for Underlying Shares purchased for
the account of a Portfolio upon (i) receipt of advice from the
Portfolio's investment adviser that such Underlying Shares
have been purchased and will be transferred to the account of
the Custodian, on behalf of the Portfolio, on the books and
records of the Underlying Transfer Agent, and (ii) the making
of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Portfolio. The
Custodian shall receive confirmation from the Underlying
Transfer Agent of the purchase of such securities and the
transfer of such securities to the Custodian's account with
the Underlying Transfer Agent only after such payment is made.
The Custodian shall transfer Underlying Shares redeemed for
the account of a Portfolio (i) upon receipt of an advice from
the Portfolio's investment adviser that such securities have
been redeemed and that payment for such securities will be
transferred to the Custodian and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and
payment for the account of the Portfolio. The Custodian will
receive confirmation from the Underlying Transfer Agent of the
redemption of such securities and payment therefor only after
such securities are redeemed. Copies of all advices from the
Portfolio's investment adviser of purchases and sales of
Underlying Shares for the account of the Portfolio shall
identify the Portfolio, be maintained for the Portfolio by the
Custodian, and be provided to the investment adviser at its
request;
4) The Custodian shall be not be liable to the Fund or any
Portfolio for any loss or damage to the Fund or any Portfolio
resulting from maintenance of Underlying Shares with
Underlying Transfer Agent except for losses resulting directly
from the negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their
employees.
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SECTION 2.11 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
SECTION 2.12 PROXIES. The Custodian shall, with respect to the
domestic securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are registered
otherwise than in the name of the Portfolio or a nominee of the Portfolio,
all proxies, without indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such securities.
SECTION 2.13 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES.
Subject to the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund for each Portfolio all written information (including,
without limitation, pendency of calls and maturities of domestic securities
and expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and the
maturity of futures contracts purchased or sold by the Portfolio) received by
the Custodian from issuers of the securities being held for the Portfolio.
With respect to tender or exchange offers, the Custodian shall transmit
promptly to the Portfolio all written information received by the Custodian
from issuers of the securities whose tender or exchange is sought and from
the party (or his agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any tender offer, exchange
offer or any other similar transaction, the Portfolio shall notify the
Custodian at least three business days prior to the date on which the
Custodian is to take such action.
SECTION 3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER OF THE PORTFOLIOS
SECTION 3.1 DEFINITIONS. The following capitalized terms shall have
the indicated meanings:
"COUNTRY RISK" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment; economic and financial infrastructure
(including any Mandatory Securities Depositories operating in the country);
prevailing or developing custody and settlement practices; and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held
in custody in that country.
"ELIGIBLE FOREIGN CUSTODIAN" has the meaning set forth in section (a)(1) of
Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank
(as defined in Rule 17f-5), a bank holding company meeting the requirements
of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other
appropriate action of the SEC), or a foreign branch of a Bank
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(as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a
custodian under Section 17(f) of the 1940 Act, except that the term does not
include Mandatory Securities Depositories.
"FOREIGN ASSETS" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and
such cash and cash equivalents as are reasonably necessary to effect the
Portfolios' transactions in such investments.
"FOREIGN CUSTODY MANAGER" has the meaning set forth in section (a)(2) of Rule
17f-5.
"MANDATORY SECURITIES DEPOSITORY" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if
the Fund, on the Portfolios' behalf, determines to place Foreign Assets in a
country outside the United States (i) because required by law or regulation;
(ii) because securities cannot be withdrawn from such foreign securities
depository or clearing agency; or (iii) because maintaining or effecting
trades in securities outside the foreign securities depository or clearing
agency is not consistent with prevailing or developing custodial or market
practices.
SECTION 3.2 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Fund, by resolution adopted by the Board, hereby delegates to the
Custodian with respect to the Portfolios, subject to Section (b) of Rule
17f-5, the responsibilities set forth in this Section 3 with respect to
Foreign Assets of the Portfolios held outside the United States, and the
Custodian hereby accepts such delegation, as Foreign Custody Manager with
respect to the Portfolios.
SECTION 3.3 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Agreement, which list of countries may be
amended from time to time by the Fund with the Agreement of the Foreign
Custody Manager. The Foreign Custody Manager shall list on Schedule A the
Eligible Foreign Custodians selected by the Foreign Custody Manager to
maintain the assets of the Portfolios, which list of Eligible Foreign
Custodians may be amended from time to time in the sole discretion of the
Foreign Custody Manager. Mandatory Securities Depositories are listed on
Schedule B to this Contract, which Schedule B may be amended from time to
time by the Foreign Custody Manager. The Foreign Custody Manager will provide
amended versions of Schedules A and B in accordance with Section 3.7 hereof.
Upon the receipt by the Foreign Custody Manager of Proper
Instructions to open an account or to place or maintain Foreign Assets in a
country listed on Schedule A, and the fulfillment by the Fund on behalf of
the Portfolios of the applicable account opening requirements for such
country, the Foreign Custody Manager shall be deemed to have been
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delegated by the Board on behalf of the Portfolios responsibility as Foreign
Custody Manager with respect to that country and to have accepted such
delegation. Following the receipt of Proper Instructions directing the
Foreign Custody Manager to close the account of a Portfolio with the Eligible
Foreign Custodian selected by the Foreign Custody Manager in a designated
country, the delegation by the Board on behalf of the Portfolios to the
Custodian as Foreign Custody Manager for that country shall be deemed to have
been withdrawn and the Custodian shall immediately cease to be the Foreign
Custody Manager of the Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to
the Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall
have no further responsibility as Foreign Custody Manager to the Fund with
respect to the country as to which the Custodian's acceptance of delegation
is withdrawn.
SECTION 3.4 SCOPE OF DELEGATED RESPONSIBILITIES.
3.4.1. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of this Section 3, the Portfolios' Foreign Custody Manager may
place and maintain the Foreign Assets in the care of the Eligible Foreign
Custodian selected by the Foreign Custody Manager in each country listed on
Schedule A, as amended from time to time. In performing its delegated
responsibilities as Foreign Custody Manager to place or maintain Foreign
Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall
determine that the Foreign Assets will be subject to reasonable care, based
on the standards applicable to custodians in the country in which the Foreign
Assets will be held by that Eligible Foreign Custodian, after considering all
factors relevant to the safekeeping of such assets, including, without
limitation the factors specified in Rule 17f-5(c)(1).
3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign
Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign
Custodian that is a foreign securities depository or clearing agency)
governing the foreign custody arrangements with each Eligible Foreign
Custodian selected by the Foreign Custody Manager will satisfy the
requirements of Rule 17f-5(c)(2).
3.4.3. MONITORING. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by the
Foreign Custody Manager, the Foreign Custody Manager shall establish a system
to monitor (i) the appropriateness of maintaining the Foreign Assets with
such Eligible Foreign Custodian and (ii) the contract governing the custody
arrangements established by the Foreign Custody Manager with the Eligible
Foreign Custodian (or the rules or established practices and procedures in
the case of an Eligible Foreign Custodian selected by the Foreign Custody
Manager which is a foreign
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securities depository or clearing agency that is not a Mandatory Securities
Depository). In the event the Foreign Custody Manager determines that the
custody arrangements with an Eligible Foreign Custodian it has selected are
no longer appropriate, the Foreign Custody Manager shall notify the Board in
accordance with Section 3.7 hereunder.
SECTION 3.5 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For
purposes of this Section 3, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and
maintaining the Foreign Assets in each country for which the Custodian is
serving as Foreign Custody Manager of the Portfolios. The Fund, on behalf of
the Portfolios, and the Board shall be deemed to be monitoring on a
continuing basis such Country Risk to the extent that the Board considers
necessary or appropriate. The Fund and the Custodian each expressly
acknowledge that the Foreign Custody Manager shall not be delegated any
responsibilities under this Section 3 with respect to Mandatory Securities
Depositories.
SECTION 3.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE
PORTFOLIOS. In performing the responsibilities delegated to it, the Foreign
Custody Manager agrees to exercise reasonable care, prudence and diligence
such as a person having responsibility for the safekeeping of assets of
management investment companies registered under the 1940 Act would exercise.
SECTION 3.7 REPORTING REQUIREMENTS. The Foreign Custody Manager
shall report the withdrawal of the Foreign Assets from an Eligible Foreign
Custodian and the placement of such Foreign Assets with another Eligible
Foreign Custodian by providing to the Board amended Schedules A or B at the
end of the calendar quarter in which an amendment to either Schedule has
occurred. The Foreign Custody Manager shall make written reports notifying
the Board of any other material change in the foreign custody arrangements of
the Portfolios described in this Section 3 after the occurrence of the
material change.
SECTION 3.8 REPRESENTATIONS WITH RESPECT TO RULE 17f-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this
Agreement to the Custodian as the Foreign Custody Manager of the Portfolios.
SECTION 3.9 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS
FOREIGN CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign
Custody Manager of the Portfolios shall be effective as of the date of
execution of this Agreement and shall remain in effect until terminated at
any time, without penalty, by written notice from the terminating party to
the non-terminating party. Termination will become effective thirty (30) days
after receipt by the non-terminating party of such notice. The provisions of
Section 3.3
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hereof shall govern the delegation to and termination of the Custodian as
Foreign Custody Manager of the Portfolios with respect to designated
countries.
SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS
HELD OUTSIDE OF THE UNITED STATES
SECTION 4.1 DEFINITIONS. Capitalized terms in this Section 4 shall
have the following meanings:
"FOREIGN SECURITIES SYSTEM" means either a clearing agency or a securities
depository listed on Schedule A hereto or a Mandatory Securities Depository
listed on Schedule B hereto.
"FOREIGN SUB-CUSTODIAN" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2 HOLDING SECURITIES. The Custodian shall identify on its
books as belonging to the Portfolios the foreign securities held by each
Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold
foreign securities for all of its customers, including the Portfolios, with
any Foreign Sub-Custodian in an account that is identified as belonging to
the Custodian for the benefit of its customers, provided however, that (i)
the records of the Custodian with respect to foreign securities of the
Portfolios which are maintained in such account shall identify those
securities as belonging to the Portfolios and (ii), to the extent permitted
and customary in the market in which the account is maintained, the Custodian
shall require that securities so held by the Foreign Sub-Custodian be held
separately from any assets of such Foreign Sub-Custodian or of other
customers of such Foreign Sub-Custodian.
SECTION 4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country only
through arrangements implemented by the Foreign Sub-Custodian in such country
pursuant to the terms of this Agreement.
SECTION 4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. Delivery of Foreign Securities. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by such Foreign Sub-Custodian, or in a Foreign Securities System
account, only upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in the
following cases:
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(i) upon the sale of such foreign securities for the Portfolios in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivery against
expectation of receiving later payment; or (B) in the case of
a sale effected through a Foreign Securities System in
accordance with the rules governing the operation of the
Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolios;
(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
(v) to the issuer thereof, or its agent, for transfer into the
name of the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian or such
Foreign Sub-Custodian) or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market
custom; PROVIDED that in any such case the Foreign
Sub-Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from
the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities,
the surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by
the Portfolios requiring a pledge of assets by the Portfolios;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
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(xi) in connection with the lending of foreign securities; and
(xii) for any other proper purpose, BUT ONLY upon receipt of Proper
Instructions specifying the foreign securities to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper trust
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
4.4.2. Payment of Portfolio Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out, monies
of a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A)
delivering money to the seller thereof or to a dealer therefor
(or an agent for such seller or dealer) against expectation of
receiving later delivery of such foreign securities; or (B) in
the case of a purchase effected through a Foreign Securities
System, in accordance with the rules governing the operation
of such Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees
under this Agreement, legal fees, accounting fees, and other
operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) in connection with the borrowing or lending of foreign
securities; and
(vii) for any other proper purpose, BUT ONLY upon receipt of Proper
Instructions specifying the amount of such payment, setting
forth the purpose for which such payment is to be made,
declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom such payment is to be
made.
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4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for Foreign Assets received
for the account of the Portfolios and delivery of Foreign Assets maintained
for the account of the Portfolios may be effected in accordance with the
customary established securities trading or processing practices and
procedures in the country or market in which the transaction occurs,
including, without limitation, delivering Foreign Assets to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer)
with the expectation of receiving later payment for such Foreign Assets from
such purchaser or dealer.
The Custodian shall provide to the Board the information with
respect to custody and settlement practices in countries in which the
Custodian employs a Foreign Sub-Custodian, including without limitation
information relating to Foreign Securities Systems, described on Schedule C
hereto at the time or times set forth on such Schedule. The Custodian may
revise Schedule C from time to time, provided that no such revision shall
result in the Board being provided with substantively less information than
had been previously provided hereunder.
SECTION 4.5 REGISTRATION OF FOREIGN SECURITIES. The foreign
securities maintained in the custody of a Foreign Sub-Custodian (other than
bearer securities) shall be registered in the name of the applicable
Portfolio or in the name of the Custodian or in the name of any Foreign
Sub-Custodian or in the name of any nominee of the foregoing, and the Fund on
behalf of such Portfolio agrees to hold any such nominee harmless from any
liability as a holder of record of such foreign securities. The Custodian or
a Foreign Sub-Custodian shall not be obligated to accept securities on behalf
of a Portfolio under the terms of this Agreement unless the form of such
securities and the manner in which they are delivered are in accordance with
reasonable market practice.
SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books
as belonging to the Fund cash (including cash denominated in foreign
currencies) deposited with the Custodian. Where the Custodian is unable to
maintain, or market practice does not facilitate the maintenance of, cash on
the books of the Custodian, a bank account or bank accounts opened and
maintained outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian shall be subject only to draft or order by the Custodian or
such Foreign Sub-Custodian, acting pursuant to the terms of this Agreement to
hold cash received by or from or for the account of the Portfolio.
SECTION 4.7 COLLECTION OF INCOME. The Custodian shall use reasonable
commercial efforts to collect all income and other payments with respect to
the Foreign Assets held hereunder to which the Portfolios shall be entitled
and shall credit such income, as collected, to the applicable Portfolio. In
the event that extraordinary measures are required to collect such income,
the Fund and the Custodian shall consult as to such measures and as to the
compensation and expenses of the Custodian relating to such measures.
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SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign
securities held pursuant to this Agreement, the Custodian will use reasonable
commercial efforts to facilitate the exercise of voting and other shareholder
rights, subject always to the laws, regulations and practical constraints
that may exist in the country where such securities are issued. The Fund
acknowledges that local conditions, including lack of regulation, onerous
procedural obligations, lack of notice and other factors may have the effect
of severely limiting the ability of the Fund to exercise shareholder rights.
SECTION 4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The
Custodian shall transmit promptly to the Fund written information (including,
without limitation, pendency of calls and maturities of foreign securities
and expirations of rights in connection therewith) received by the Custodian
via the Foreign Sub-Custodians from issuers of the foreign securities being
held for the account of the Portfolios. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund written information
so received by the Custodian from issuers of the foreign securities whose
tender or exchange is sought or from the party (or its agents) making the
tender or exchange offer. The Custodian shall not be liable for any untimely
exercise of any tender, exchange or other right or power in connection with
foreign securities or other property of the Portfolios at any time held by it
unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual
possession of such foreign securities or property and (ii) the Custodian
receives Proper Instructions with regard to the exercise of any such right or
power, and both (i) and (ii) occur at least three business days prior to the
date on which the Custodian is to take action to exercise such right or power
SECTION 4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN
SECURITIES SYSTEMS. Each agreement pursuant to which the Custodian employs as
a Foreign Sub-Custodian shall, to the extent possible, require the Foreign
Sub-Custodian to exercise reasonable care in the performance of its duties
and, to the extent possible, to indemnify, and hold harmless, the Custodian
from and against any loss, damage, cost, expense, liability or claim arising
out of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At the Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against
a Foreign Sub-Custodian as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Portfolios have not
been made whole for any such loss, damage, cost, expense, liability or claim.
SECTION 4.11 TAX LAW. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund, the
Portfolios or the Custodian as custodian of the Portfolios by the tax law of
the United States or of any state or political subdivision thereof. It shall
be the responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund with respect to the Portfolios or the Custodian as
custodian of the Portfolios by the tax law of countries other than those
mentioned in the above sentence,
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including responsibility for withholding and other taxes, assessments or
other governmental charges, certifications and governmental reporting. The
sole responsibility of the Custodian with regard to such tax law shall be to
use reasonable efforts to assist the Fund with respect to any claim for
exemption or refund under the tax law of countries for which the Fund has
provided such information.
SECTION 4.12 CONFLICT. If the Custodian is delegated the
responsibilities of Foreign Custody Manager pursuant to the terms of Section
3 hereof, in the event of any conflict between the provisions of Sections 3
and 4 hereof, the provisions of Section 3 shall prevail.
SECTION 5. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES
The Custodian shall receive from the distributor for the Shares or
from the Transfer Agent and deposit into the account of the appropriate
Portfolio such payments as are received for Shares thereof issued or sold
from time to time by the Fund. The Custodian will provide timely notification
to the Fund on behalf of each such Portfolio and the Transfer Agent of any
receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make funds
available for payment to holders of Shares who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In connection
with the redemption or repurchase of Shares, the Custodian is authorized upon
receipt of instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Fund and the Custodian.
SECTION 6. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Agreement means a
writing signed or initialed by one or more person or persons as the Board
shall have from time to time authorized. Each such writing shall set forth
the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian
reasonably believes them to have been given by a person authorized to give
such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Proper Instructions
may include communications effected directly between electro-mechanical or
electronic devices provided that the Fund and the Custodian agree to security
procedures, including but not limited to, the security
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procedures selected by the Fund in the Funds Transfer Addendum attached
hereto. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.10.
SECTION 7. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from
the Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, PROVIDED that all such payments
shall be accounted for to the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Portfolio except as otherwise directed by the Board.
SECTION 8. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed
by it to be genuine and to have been properly executed by or on behalf of the
Fund. The Custodian may receive and accept a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Fund ("CERTIFIED
RESOLUTION") as conclusive evidence (a) of the authority of any person to act
in accordance with such resolution or (b) of any determination or of any
action by the Board as described in such resolution, and such resolution may
be considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
SECTION 9. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information
to the entity or entities appointed by the Board to keep the books of account
of each Portfolio and/or compute the
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net asset value per Share of the outstanding Shares or, if directed in
writing to do so by the Fund on behalf of the Portfolio, shall itself keep
such books of account and/or compute such net asset value per Share. If so
directed, the Custodian shall also calculate daily the net income of the
Portfolio as described in the Prospectus and shall advise the Fund and the
Transfer Agent daily of the total amounts of such net income and, if
instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its
various components. The Fund acknowledges and agrees that, with respect to
investments maintained with the Underlying Transfer Agent, the Underlying
Transfer Agent is the sole source of information on the number of shares of a
fund held by it on behalf of a Portfolio and that the Custodian has the right
to rely on holdings information furnished by the Underlying Transfer Agent to
the Custodian in performing its duties under this Agreement, including
without limitation, the duties set forth in this Section 9 and in Section 10
hereof; provided, however, that the Custodian shall be obligated to reconcile
information as to purchases and sales of Underlying Shares contained in trade
instructions and confirmations received by the Custodian and to report
promptly any discrepancies to the Underlying Transfer Agent. The calculations
of the net asset value per Share and the daily income of each Portfolio shall
be made at the time or times described from time to time in the Prospectus.
SECTION 10. RECORDS
The Custodian shall with respect to each Portfolio create and
maintain all records relating to its activities and obligations under this
Agreement in such manner as will meet the obligations of the Fund under the
1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and
31a-2 thereunder. All such records shall be the property of the Fund and
shall at all times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents of the Fund
and employees and agents of the SEC. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by each
Portfolio and held by the Custodian and shall, when requested to do so by the
Fund and for such compensation as shall be agreed upon between the Fund and
the Custodian, include certificate numbers in such tabulations.
SECTION 11. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund on
behalf of each applicable Portfolio may from time to time request, to obtain
from year to year favorable opinions from the Fund's independent accountants
with respect to its activities hereunder in connection with the preparation
of the Fund's Form N-1A, and Form N-SAR or other annual reports to the SEC
and with respect to any other requirements thereof.
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SECTION 12. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or
maintained in a U.S. Securities System or a Foreign Securities System,
relating to the services provided by the Custodian under this Agreement; such
reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there
are no such inadequacies, the reports shall so state.
SECTION 13. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Custodian.
SECTION 14. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto received
by it or delivered by it pursuant to this Agreement and shall be held
harmless in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties, including any futures commission merchant acting
pursuant to the terms of a three-party futures or options agreement. The
Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement, but shall be kept indemnified by and shall
be without liability to the Fund for any action taken or omitted by it in
good faith without negligence. It shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted
pursuant to such advice. The Custodian shall be without liability to the Fund
and the Portfolios for any loss, liability, claim or expense resulting from
or caused by anything which is (A) part of Country Risk (as defined in
Section 3 hereof), including without limitation nationalization,
expropriation, currency restrictions, or acts of war, revolution, riots or
terrorism, or (B) part of the "prevailing country risk" of the Portfolios, as
such term is used in SEC Release Nos. IC-22658; IS-1080 (May 12, 1997) or as
such term or other similar terms are now or in the future interpreted by the
SEC or by the staff of the Division of Investment Management thereof.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or
agent, the Custodian shall be without
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liability to the Fund for any loss, liability, claim or expense resulting
from or caused by; (i) events or circumstances beyond the reasonable control
of the Custodian or any sub-custodian or Securities System or any agent or
nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work
stoppages, natural disasters, or other similar events or acts; (ii) errors by
the Fund or the Investment Advisor in their instructions to the Custodian
provided such instructions have been in accordance with this Agreement; (iii)
the insolvency of or acts or omissions by a Securities System; (iv) any delay
or failure of any broker, agent or intermediary, central bank or other
commercially prevalent payment or clearing system to deliver to the
Custodian's sub-custodian or agent securities purchased or in the remittance
or payment made in connection with securities sold; (v) any delay or failure
of any company, corporation, or other body in charge of registering or
transferring securities in the name of the Custodian, the Fund, the
Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits;
(vi) delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System;
and (vii) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or any other country,
or political subdivision thereof or of any court of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set
forth with respect to sub-custodians generally in this Agreement.
If the Fund on behalf of a Portfolio requires the Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being liable
for the payment of money or incurring liability of some other form, the Fund
on behalf of the Portfolio, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and
form satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) or in the event that the Custodian or its nominee shall incur or
be assessed any taxes, charges, expenses, assessments, claims or liabilities
in connection with the performance of this Agreement, except such as may
arise from its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the account of
the applicable Portfolio shall be security therefor and should the Fund fail
to repay the Custodian promptly, the Custodian shall be entitled to utilize
available cash and to dispose of such Portfolio's assets to the extent
necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
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SECTION 15. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties hereto and may
be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect
not sooner than sixty (60) days after the date of such delivery or mailing;
provided, however, that the Fund shall not amend or terminate this Agreement
in contravention of any applicable federal or state regulations, or any
provision of the Fund's Declaration of Trust, and further provided, that the
Fund on behalf of one or more of the Portfolios may at any time by action of
its Board (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately
terminate this Agreement in the event of the appointment of a conservator or
receiver for the Custodian by the Comptroller of the Currency or upon the
happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be
due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
SECTION 16. SUCCESSOR CUSTODIAN
If a successor custodian for one or more Portfolios shall be
appointed by the Board, the Custodian shall, upon termination, deliver to
such successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities of each applicable Portfolio then held
by it hereunder and shall transfer to an account of the successor custodian
all of the securities of each such Portfolio held in a Securities System or
at the Underlying Transfer Agent.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a Certified Resolution, deliver at the
office of the Custodian and transfer such securities, funds and other
properties in accordance with such resolution.
In the event that no written order designating a successor custodian
or Certified Resolution shall have been delivered to the Custodian on or
before the date when such termination shall become effective, then the
Custodian shall have the right to deliver to a bank or trust company, which
is a "bank" as defined in the 1940 Act, doing business in Boston,
Massachusetts, or New York, New York, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and
other properties held by the Custodian on behalf of each applicable Portfolio
and all instruments held by the Custodian relative thereto and all other
property held by it under this Agreement on behalf of each applicable
Portfolio, and to transfer to an account of such successor custodian all of
the securities of each such Portfolio held in any Securities System or at the
Underlying Transfer
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Agent. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Agreement.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the Certified Resolution to appoint a
successor custodian, the Custodian shall be entitled to fair compensation for
its services during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this Agreement
relating to the duties and obligations of the Custodian shall remain in full
force and effect.
SECTION 17. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian
and the Fund on behalf of each of the Portfolios, may from time to time agree
on such provisions interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general tenor
of this Agreement. Any such interpretive or additional provisions shall be in
a writing signed by both parties and shall be annexed hereto, PROVIDED that
no such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Fund's Declaration of
Trust. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
SECTION 18. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares
in addition to RWB U.S. Bond Fund, U.S. Total Market Fund, U.S. High Book to
Market Fund, U.S. Small Companies Fund, International High Book to Market
Fund and International Small Company Fund, with respect to which it desires
to have the Custodian render services as custodian under the terms hereof, it
shall so notify the Custodian in writing, and if the Custodian agrees in
writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
SECTION 19. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
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SECTION 20. PRIOR AGREEMENTS
This Agreement supersedes and terminates, as of the date hereof, all
prior Agreements between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
SECTION 21. NOTICES.
Any notice, instruction or other instrument required to be given
hereunder may be delivered in person to the offices of the parties as set
forth herein during normal business hours or delivered prepaid registered
mail or by telex, cable or telecopy to the parties at the following addresses
or such other addresses as may be notified by any party from time to time.
To the Fund: RWB FUNDS - INVESTMENT TRUST
1190 Saratoga Avenue
Suite 200
San Jose, California 95129
Attention: __________________
Telephone:__________________
Telecopy: __________________
To the Custodian: STATE STREET BANK AND TRUST COMPANY
1776 Heritage Drive
North Quincy, Massachusetts 02171
Attention: Stephen F. Brown
Telephone: (617) 985-5988
Telecopy: __________________
Such notice, instruction or other instrument shall be deemed to have
been served in the case of a registered letter at the expiration of five
business days after posting, in the case of cable twenty-four hours after
dispatch and, in the case of telex, immediately on dispatch and if delivered
outside normal business hours it shall be deemed to have been received at the
next time after delivery when normal business hours commence and in the case
of cable, telex or telecopy on the business day after the receipt thereof.
Evidence that the notice was properly addressed, stamped and put into the
post shall be conclusive evidence of posting.
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SECTION 22. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, addenda, exhibits, attachments and
amendments hereto may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties hereto all/each agree that any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such reproduction was made by a party in the regular course of business, and
that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence.
SECTION 23. DATA ACCESS SERVICES ADDENDUM
The Custodian and the Fund agree to be bound by the terms of the
Data Access Services Addendum attached hereto.
SECTION 24. SHAREHOLDER COMMUNICATIONS ELECTION
SEC Rule 14b-2 requires banks which hold securities for the account
of customers to respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of securities of that issuer held
by the bank unless the beneficial owner has expressly objected to disclosure
of this information. In order to comply with the rule, the Custodian needs
the Fund to indicate whether it authorizes the Custodian to provide the
Fund's name, address, and share position to requesting companies whose
securities the Fund owns. If the Fund tells the Custodian "no", the Custodian
will not provide this information to requesting companies. If the Fund tells
the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to
disclosure of this information for all securities owned by the Fund or any
funds or accounts established by the Fund. For the Fund's protection, the
Rule prohibits the requesting company from using the Fund's name and address
for any purpose other than corporate communications. Please indicate below
whether the Fund consents or objects by checking one of the alternatives
below.
YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.
NO [ ] The Custodian is not authorized to release the Fund's name,
address, and share positions.
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IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed as of April ___, 1999.
FUND SIGNATURE ATTESTED TO BY: RWB FUNDS - INVESTMENT TRUST
By:_______________________ By: _________________________
Name:____________________ Name: ______________________
Title: ____________________ Title: ______________________
SIGNATURE ATTESTED TO BY: STATE STREET BANK AND TRUST COMPANY
By:_________________________ By:________________________
Name: Stephanie L. Poster Name: Ronald E. Logue
Title: Vice President Title: Vice Chairman
<PAGE>
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
THIS ADDENDUM to the Custodian Agreement (as such term is defined below)
between RWB Funds - Investment Trust (the "Customer") and State Street Bank
and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of the Customer pursuant to that certain Custodian Agreement (the "Custodian
Agreement") dated as of April ___, 1999;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency
HORIZON-SM- Accounting System, in its role as custodian of the Customer, and
maintains certain Customer-related data ("Customer Data") in databases under
the control and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to the Customer certain Data
Access Services solely for the benefit of the Customer, and intends to
provide additional services, consistent with the terms and conditions of this
Addendum.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
(a) SYSTEM. Subject to the terms and conditions of this Addendum,
State Street hereby agrees to provide the Customer with access to State
Street's Multicurrency HORIZON-SM- Accounting System and the other
information systems (collectively, the "System") as described in Attachment
A, on a remote basis for the purpose of obtaining reports and information,
solely on computer hardware, system software and telecommunication links as
listed in Attachment B (the "Designated Configuration") of the Customer, or
certain third parties approved by State Street that serve as investment
advisors or investment managers or in other service capacities to the
Customer such as the Customer's independent auditors (each, an "Investment
Advisor"), solely with respect to the Customer, or on any designated
substitute or back-up equipment configuration with State Street's written
consent, such consent not to be unreasonably withheld.
(b) DATA ACCESS SERVICES. State Street agrees to make available to the
Customer the Data Access Services subject to the terms and conditions of this
Addendum and data access operating standards and procedures as may be issued
by State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody
by State Street or (ii) transmit accounting or other information (such
transactions are referred to herein as "Client Originated Electronic
Financial Instructions"), and (iii) access data for the purpose of reporting
and analysis, shall be deemed to be Data Access Services for purposes of this
Addendum.
(c) ADDITIONAL SERVICES. State Street may from time to time agree to
make available to the Customer additional Systems that are not described in
the attachments to this Addendum. In the absence of any other written
agreement concerning such additional systems, the term "System" shall
include, and this Addendum shall govern, the Customer's access to and use of
any additional System made available by State Street and/or accessed by the
Customer.
2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Customer acknowledge that in connection with the
Data Access Services provided under this Addendum, the Customer will have
access, through the Data Access Services, to Customer Data and to functions
of State Street's proprietary systems; provided, however that in no event
will the Customer have direct access to any third party systems-level
software that retrieves data for, stores data from, or otherwise supports the
System.
<PAGE>
3. LIMITATION ON SCOPE OF USE
(a) DESIGNATED EQUIPMENT; DESIGNATED LOCATION. The System and the Data
Access Services shall be used and accessed solely on and through the
Designated Configuration at the offices of the Customer [located in San Jose,
California or the Investment Advisor located in Santa Monica, California]
("Designated Location").
(b) DESIGNATED CONFIGURATION; TRAINED PERSONNEL. State Street shall
be responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable
both parties to perform their respective obligations under this Addendum.
State Street agrees to use commercially reasonable efforts to maintain the
System so that it remains serviceable, provided, however, that State Street
does not guarantee or assure uninterrupted remote access use of the System.
(c) SCOPE OF USE. The Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of
reporting and analysis. The Customer shall not, and shall cause its
employees and agents not to (i) permit any third party to use the System or
the Data Access Services, (ii) sell, rent, license or otherwise use the
System or the Data Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Data Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, (iv)
allow access to the System or the Data Access Services through terminals or
any other computer or telecommunications facilities located outside the
Designated Locations, (v) allow or cause any information (other than
portfolio holdings, valuations of portfolio holdings, and other information
reasonably necessary for the management or distribution of the assets of the
Customer) transmitted from State Street's databases, including data from
third party sources, available through use of the System or the Data Access
Services to be redistributed or retransmitted to another computer, terminal
or other device for other than use for or on behalf of the Customer or (vi)
modify the System in any way, including without limitation, developing any
software for or attaching any devices or computer programs to any equipment,
system, software or database which forms a part of or is resident on the
Designated Configuration.
(d) OTHER LOCATIONS. Except in the event of an emergency or of a
planned System shutdown, the Customer's access to services performed by the
System or to Data Access Services at the Designated Location may be
transferred to a different location only upon the prior written consent of
State Street. In the event of an emergency or System shutdown, the Customer
may use any back-up site included in the Designated Configuration or any
other back-up site agreed to by State Street, which agreement will not be
unreasonably withheld. The Customer may secure from State Street the right
to access the System or the Data Access Services through computer and
telecommunications facilities or devices complying with the Designated
Configuration at additional locations only upon the prior written consent of
State Street and on terms to be mutually agreed upon by the parties.
(e) TITLE. Title and all ownership and proprietary rights to the
System, including any enhancements or modifications thereto, whether or not
made by State Street, are and shall remain with State Street.
(f) NO MODIFICATION. Without the prior written consent of State
Street, the Customer shall not modify, enhance or otherwise create derivative
works based upon the System, nor shall the Customer reverse engineer,
decompile or otherwise attempt to secure the source code for all or any part
of the System.
(g) SECURITY PROCEDURES. The Customer shall comply with data access
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and
to access the Data Access Services. The Customer shall have access only to
the Customer Data and authorized transactions agreed upon from time to time
by State Street and, upon notice from State Street, the Customer shall
discontinue remote use of the System and access to Data Access Services for
any security reasons cited by State Street; provided, that, in such event,
State Street shall, for a period not less than 180 days (or such other
shorter period specified by the Customer) after such discontinuance, assume
responsibility to provide accounting services under the terms of the
Custodian Agreement.
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(h) INSPECTIONS. State Street shall have the right to inspect the use
of the System and the Data Access Services by the Customer and the Investment
Advisor to ensure compliance with this Addendum. The on-site inspections
shall be upon prior written notice to the Customer and the Investment Advisor
and at reasonably convenient times and frequencies so as not to result in an
unreasonable disruption of the Customer's or the Investment Advisor's
business.
4. PROPRIETARY INFORMATION
(a) PROPRIETARY INFORMATION. The Customer acknowledges and State
Street represents that the System and the databases, computer programs,
screen formats, report formats, interactive design techniques, documentation
and other information made available to the Customer by State Street as part
of the Data Access Services and through the use of the System constitute
copyrighted, trade secret, or other proprietary information of substantial
value to State Street. Any and all such information provided by State Street
to the Customer shall be deemed proprietary and confidential information of
State Street (hereinafter "Proprietary Information"). The Customer agrees
that it will hold such Proprietary Information in the strictest confidence
and secure and protect it in a manner consistent with its own procedures for
the protection of its own confidential information and to take appropriate
action by instruction or agreement with its employees who are permitted
access to the Proprietary Information to satisfy its obligations hereunder.
The Customer further acknowledges that State Street shall not be required to
provide the Investment Advisor with access to the System unless it has first
received from the Investment Advisor an undertaking with respect to State
Street's Proprietary Information in the form of Attachment C to this
Addendum. The Customer shall use all commercially reasonable efforts to
assist State Street in identifying and preventing any unauthorized use,
copying or disclosure of the Proprietary Information or any portions thereof
or any of the logic, formats or designs contained therein.
(b) COOPERATION. Without limitation of the foregoing, the Customer
shall advise State Street immediately in the event the Customer learns or has
reason to believe that any person to whom the Customer has given access to
the Proprietary Information, or any portion thereof, has violated or intends
to violate the terms of this Addendum, and the Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief
in the name of the Customer or State Street against any such person.
(c) INJUNCTIVE RELIEF. The Customer acknowledges that the disclosure
of any Proprietary Information, or of any information which at law or equity
ought to remain confidential, will immediately give rise to continuing
irreparable injury to State Street inadequately compensable in damages at
law. In addition, State Street shall be entitled to obtain immediate
injunctive relief against the breach or threatened breach of any of the
foregoing undertakings, in addition to any other legal remedies which may be
available.
(d) SURVIVAL. The provisions of this Section 4 shall survive the
termination of this Addendum.
5. LIMITATION ON LIABILITY
(a) LIMITATION ON AMOUNT AND TIME FOR BRINGING ACTION. The Customer
agrees that any liability of State Street to the Customer or any third party
arising out of State Street's provision of Data Access Services or the System
under this Addendum shall be limited to the amount of custody fees paid by
the Customer for the preceding two months. In no event shall State Street be
liable to the Customer or any other party for any special, indirect, punitive
or consequential damages even if advised of the possibility of such damages.
No action, regardless of form, arising out of this Addendum may be brought by
the Customer more than two years after the Customer has knowledge that the
cause of action has arisen.
(b) LIMITED WARRANTIES. NO OTHER WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE
STREET.
(c) THIRD-PARTY DATA. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
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(d) REGULATORY REQUIREMENTS. As between State Street and the Customer,
the Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System
and the conformity thereof with any requirements of law.
(e) FORCE MAJEURE. Neither party shall be liable for any costs or
damages due to delay or nonperformance under this Addendum arising out of any
cause or event beyond such party's control, including without limitation,
cessation of services hereunder or any damages resulting therefrom to the
other party, or the Customer as a result of work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental action, or
communication disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful
misconduct in the use by the Customer of the Data Access Services or the
System, including any loss incurred by State Street resulting from a security
breach at the Designated Location or committed by the Customer's employees or
agents or the Investment Advisor and (ii) any loss resulting from incorrect
Client Originated Electronic Financial Instructions. State Street shall be
entitled to rely on the validity and authenticity of Client Originated
Electronic Financial Instructions without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by State Street from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule
in effect from time to time between the parties (the "Fee Schedule"). Any
tariffs, duties or taxes imposed or levied by any government or governmental
agency by reason of the transactions contemplated by this Addendum,
including, without limitation, federal, state and local taxes, use, value
added and personal property taxes (other than income, franchise or similar
taxes which may be imposed or assessed against State Street) shall be borne
by the Customer. Any claimed exemption from such tariffs, duties or taxes
shall be supported by proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
(a) TRAINING. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the
Customer's personnel in connection with the use of the System on the
Designated Configuration. The Customer agrees that it will set aside, during
regular business hours or at other times agreed upon by both parties,
sufficient time to enable all operators of the System and the Data Access
Services, designated by the Customer, to receive the training offered by
State Street pursuant to this Addendum.
(b) INSTALLATION AND CONVERSION. State Street shall be responsible for
the technical installation and conversion ("Installation and Conversion") of
the Designated Configuration. The Customer shall have the following
responsibilities in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely acquisition
and maintenance of the hardware and software that attach to the
Designated Configuration in order to use the Data Access Services
at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this Addendum.
9. SUPPORT
During the term of this Addendum, State Street agrees to provide the
support services set out in Attachment D to this Addendum.
4
<PAGE>
10. TERM OF ADDENDUM
(a) TERM OF ADDENDUM. This Addendum shall become effective on the date
of its execution by State Street and shall remain in full force and effect
until terminated as herein provided.
(b) TERMINATION OF ADDENDUM. Either party may terminate this Addendum
(i) for any reason by giving the other party at least one-hundred and eighty
days' prior written notice in the case of notice of termination by State
Street to the Customer or thirty days' notice in the case of notice from the
Customer to State Street of termination; or (ii) immediately for failure of
the other party to comply with any material term and condition of this
Addendum by giving the other party written notice of termination. In the
event the Customer shall cease doing business, shall become subject to
proceedings under the bankruptcy laws (other than a petition for
reorganization or similar proceeding) or shall be adjudicated bankrupt, this
Addendum and the rights granted hereunder shall, at the option of State
Street, immediately terminate with notice to the Customer. This Addendum
shall in any event terminate as to any Customer within 90 days after the
termination of the Custodian Agreement applicable to such Customer.
(c) TERMINATION OF THE RIGHT TO USE. Upon termination of this Addendum
for any reason, any right to use the System and access to the Data Access
Services shall terminate and the Customer shall immediately cease use of the
System and the Data Access Services. Immediately upon termination of this
Addendum for any reason, the Customer shall return to State Street all copies
of documentation and other Proprietary Information in its possession;
provided, however, that in the event that either party terminates this
Addendum or the Custodian Agreement for any reason other than the Customer's
breach, State Street shall provide the Data Access Services for a period of
time and at a price to be agreed upon by the parties.
11. MISCELLANEOUS
(a) ASSIGNMENT; SUCCESSORS. This Addendum and the rights and
obligations of the Customer and State Street hereunder shall not be assigned
by either party without the prior written consent of the other party, except
that State Street may assign this Addendum to a successor of all or a
substantial portion of its business, or to a party controlling, controlled
by, or under common control with State Street.
(b) SURVIVAL. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Addendum.
(c) ENTIRE AGREEMENT. This Addendum and the attachments hereto
constitute the entire understanding of the parties hereto with respect to the
Data Access Services and the use of the System and supersedes any and all
prior or contemporaneous representations or agreements, whether oral or
written, between the parties as such may relate to the Data Access Services
or the System, and cannot be modified or altered except in a writing duly
executed by the parties. This Addendum is not intended to supersede or
modify the duties and liabilities of the parties hereto under the Custodian
Agreement or any other agreement between the parties hereto except to the
extent that any such agreement specifically refers to the Data Access
Services or the System. No single waiver of any right hereunder shall be
deemed to be a continuing waiver.
(d) SEVERABILITY. If any provision or provisions of this Addendum
shall be held to be invalid, unlawful, or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired.
(e) GOVERNING LAW. This Addendum shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts
without regard to the conflict of laws provisions thereof.
5
<PAGE>
ATTACHMENT A
Multicurrency HORIZON-SM- Accounting System
System Product Description
I. The Multicurrency HORIZON-SM- Accounting System is designed to provide
lot level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general
ledger entries; 2) calculation of daily income and expense; 3) reconciliation
of daily activity with the trial balance, and 4) appropriate automated
feeding mechanisms to (i) domestic and international settlement systems, (ii)
daily, weekly and monthly evaluation services, (iii) portfolio performance
and analytic services, (iv) customer's internal computing systems and (v)
various State Street provided information services products.
II. GlobalQuest-Registered Trademark- is designed to provide customer access
to the following information maintained on The Multicurrency HORIZON-SM-
Accounting System: 1) cash transactions and balances; 2) purchases and sales;
3) income receivables; 4) tax refund receivables; 5) daily priced positions;
6) open trades; 7) settlement status; 8) foreign exchange transactions; 9)
trade history, and 10) daily, weekly and monthly evaluation services.
6
<PAGE>
ATTACHMENT B
*DESIGNATED CONFIGURATION
7
<PAGE>
ATTACHMENT C
UNDERTAKING
The Undersigned understands that in the course of its employment as
Investment Advisor to RWB Funds - Investment Trust (the "Customer") it will
have access to State Street Bank and Trust Company's ("State Street")
Multicurrency HORIZON-SM- Accounting System and other information systems
(collectively, the "System").
The Undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the Undersigned by
State Street as part of the Data Access Services provided to the Customer and
through the use of the System constitute copyrighted, trade secret, or other
proprietary information of substantial value to State Street. Any and all
such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with
its employees who are permitted access to the Proprietary Information to
satisfy its obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is
not authorized. It will not intentionally adversely affect the integrity of
the System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned
shall immediately cease use of the System and the Data Access Services.
Immediately upon notice by State Street for any reason, the Undersigned shall
return to State Street all copies of documentation and other Proprietary
Information in its possession.
RWB ADVISORY SERVICES INC.
By:
---------------------------------------
Title:
---------------------------------------
Date:
---------------------------------------
8
<PAGE>
ATTACHMENT C
UNDERTAKING
The Undersigned understands that in the course of its employment as
Investment Advisor to RWB Funds - Investment Trust (the "Customer") it will
have access to State Street Bank and Trust Company's ("State Street")
Multicurrency HORIZON-SM- Accounting System and other information systems
(collectively, the "System").
The Undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the Undersigned by
State Street as part of the Data Access Services provided to the Customer and
through the use of the System constitute copyrighted, trade secret, or other
proprietary information of substantial value to State Street. Any and all
such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with
its employees who are permitted access to the Proprietary Information to
satisfy its obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is
not authorized. It will not intentionally adversely affect the integrity of
the System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned
shall immediately cease use of the System and the Data Access Services.
Immediately upon notice by State Street for any reason, the Undersigned shall
return to State Street all copies of documentation and other Proprietary
Information in its possession.
DIMENSIONAL FUND ADVISORS, INC.
By:
---------------------------------------
Title:
---------------------------------------
Date:
---------------------------------------
9
<PAGE>
ATTACHMENT C
UNDERTAKING
The Undersigned understands that in the course of its employment as
Independent Auditor to RWB Funds - Investment Trust (the "Customer") it will
have access to State Street Bank and Trust Company's ("State Street")
Multicurrency HORIZON-SM- Accounting System and other information systems
(collectively, the "System").
The Undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the Undersigned by
State Street as part of the Data Access Services provided to the Customer and
through the use of the System constitute copyrighted, trade secret, or other
proprietary information of substantial value to State Street. Any and all
such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with
its employees who are permitted access to the Proprietary Information to
satisfy its obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is
not authorized. It will not intentionally adversely affect the integrity of
the System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned
shall immediately cease use of the System and the Data Access Services.
Immediately upon notice by State Street for any reason, the Undersigned shall
return to State Street all copies of documentation and other Proprietary
Information in its possession.
PRICEWATERHOUSECOOPERS LLC
By:
---------------------------------------
Title:
---------------------------------------
Date:
---------------------------------------
10
<PAGE>
ATTACHMENT D
SUPPORT
During the term of this Addendum, State Street agrees to provide the
following on-going support services:
a. TELEPHONE SUPPORT. The Customer Designated Persons may contact
State Street's Multicurrency HORIZON-SM- Help Desk and Customer Assistance
Center between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business
days for the purpose of obtaining answers to questions about the use of the
System, or to report apparent problems with the System. From time to time,
the Customer shall provide to State Street a list of persons, not to exceed
five in number, who shall be permitted to contact State Street for assistance
(such persons being referred to as "the Customer Designated Persons").
b. TECHNICAL SUPPORT. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The
total amount of technical support provided by State Street shall not exceed
10 resource days per year. State Street shall provide such additional
technical support as is expressly set forth in the fee schedule in effect
from time to time between the parties (the "Fee Schedule"). Technical
support, including during installation and testing, is subject to the fees
and other terms set forth in the Fee Schedule.
c. MAINTENANCE SUPPORT. State Street shall use commercially
reasonable efforts to correct system functions that do not work according to
the System Product Description as set forth on Attachment A in priority order
in the next scheduled delivery release or otherwise as soon as is practicable.
d. SYSTEM ENHANCEMENTS. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such
enhancement, State Street shall notify the Customer and shall offer the
Customer reasonable training on the enhancement. Charges for system
enhancements shall be as provided in the Fee Schedule. State Street retains
the right to charge for related systems or products that may be developed and
separately made available for use other than through the System.
e. CUSTOM MODIFICATIONS. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall
make a written request to State Street providing specifications for the
desired modification. Any custom modifications may be undertaken by State
Street in its sole discretion in accordance with the Fee Schedule.
f. LIMITATION ON SUPPORT. State Street shall have no obligation to
support the Customer's use of the System: (i) for use on any computer
equipment or telecommunication facilities which does not conform to the
Designated Configuration or (ii) in the event the Customer has modified the
System in breach of this Addendum.
11
<PAGE>
FUNDS TRANSFER ADDENDUM [LOGO]
OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
Client's (as named below) account(s) upon the receipt of a payment order in
compliance with the selected Security Procedure chosen for funds transfer and
in the amount of money that State Street has been instructed to transfer.
State Street shall execute payment orders in compliance with the Security
Procedure and with the Client's instructions on the execution date provided
that such payment order is received by the customary deadline for processing
such a request, unless the payment order specifies a later time. All payment
orders and communications received after this time will be deemed to have
been received on the next business day.
2. SECURITY PROCEDURE: The Client acknowledges that the Security Procedure
it has designated on the Selection Form was selected by the Client from
Security Procedures offered by State Street. The Client shall restrict
access to confidential information relating to the Security Procedure to
authorized persons as communicated in writing to State Street. The Client
must notify State Street immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. State Street shall verify the authenticity of
all instructions according to the Security Procedure.
3. ACCOUNT NUMBERS: State Street shall process all payment orders on the
basis of the account number contained in the payment order. In the event of
a discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern.
4. REJECTION: State Street reserves the right to decline to process or
delay the processing of a payment order which (a) is in excess of the
collected balance in the account to be charged at the time of State Street's
receipt of such payment order; (b) if initiating such payment order would
cause State Street, in State Street's sole judgment, to exceed any volume,
aggregate dollar, network, time, credit or similar limits upon wire transfers
which are applicable to State Street; or (c) if State Street, in good faith,
is unable to satisfy itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to
act on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are
received in a timely manner affording State Street reasonable opportunity to
act. However, State Street assumes no liability if the request for amendment
or cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to
detect any erroneous payment order provided that State Street complies with
the payment order instructions as received and State Street complies with the
Security Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: State Street shall assume no
responsibility for lost interest with respect to the refundable amount of any
unauthorized payment order, unless State Street is notified of the
unauthorized payment order within thirty (30) days of notification by State
Street of the acceptance of such payment order. In no event shall State
Street be liable for special, indirect or consequential damages, even if
advised of the possibility of such damages and even for failure to execute a
payment order.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS:
When a Client initiates or receives ACH credit and debit entries pursuant to
these Guidelines and the rules of the National Automated Clearing House
Association and the New England Clearing House Association, State Street will
act as an Originating Depository Financial Institution and/or Receiving
Depository Institution, as the case may be, with respect to such entries.
Credits given by State Street with respect to an ACH credit entry are
provisional until State Street receives final settlement for such entry from
the Federal Reserve Bank. If State Street does not receive such final
settlement, the Client agrees that State Street shall receive a refund of the
amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid
the amount of the entry.
9. CONFIRMATION STATEMENTS: Confirmation of State Street's execution of
payment orders shall ordinarily be provided within 24 hours notice which may
be delivered through State Street's proprietary information systems, such as,
but not limited to Horizon and GlobalQuest-Registered Trademark-, or by
facsimile or callback. The Client must report any objections to the execution
of a payment order within 30 days.
<PAGE>
FUNDS TRANSFER ADDENDUM [LOGO]
SECURITY PROCEDURE(S) SELECTION FORM
Please select one or more of the funds transfer security procedures indicated
below.
- -SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is
limited to securities brokers and dealers, clearing and depository
institutions, recognized exchanges for securities, and investment management
institutions. SWIFT provides a number of security features through encryption
and authentication to protect against unauthorized access, loss or wrong
delivery of messages, transmission errors, loss of confidentiality and
fraudulent changes to messages. SWIFT is considered to be one of the most
secure and efficient networks for the delivery of funds transfer
instructions.
SELECTION OF THIS SECURITY PROCEDURE WOULD BE MOST APPROPRIATE FOR EXISTING
SWIFT MEMBERS.
- -STANDING INSTRUCTIONS
Standing Instructions may be used where funds are transferred to a broker on
the Client's established list of brokers with which it engages in foreign
exchange transactions. Only the date, the currency and the currency amount
are variable. In order to establish this procedure, State Street will send to
the Client a list of the brokers that State Street has determined are used
by the Client. The Client will confirm the list in writing, and State Street
will verify the written confirmation by telephone. Standing Instructions will
be subject to a mutually agreed upon limit. If the payment order exceeds the
established limit, the Standing Instruction will be confirmed by telephone
prior to execution.
- -REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU)
data communications between the Client and State Street. Security procedures
include encryption and or the use of a test key by those individuals
authorized as Automated Batch Verifiers.
CLIENTS SELECTING THIS OPTION SHOULD HAVE AN EXISTING FACILITY FOR COMPLETING
CPU-CPU TRANSMISSIONS. THIS DELIVERY MECHANISM IS TYPICALLY USED FOR
HIGH-VOLUME BUSINESS.
- -GLOBAL HORIZON INTERCHANGE-SM- FUNDS TRANSFER SERVICE
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients
to electronically transmit authenticated Fedwire, CHIPS or internal book
transfer instructions to State Street.
THIS DELIVERY MECHANISM IS MOST APPROPRIATE FOR CLIENTS WITH A LOW-TO-MEDIUM
NUMBER OF TRANSACTIONS (5-75 PER DAY), ALLOWING CLIENTS TO ENTER, BATCH, AND
REVIEW WIRE TRANSFER INSTRUCTIONS ON THEIR PC PRIOR TO RELEASE TO STATE
STREET.
- -TELEPHONE CONFIRMATION (CALLBACK)
Telephone confirmation will be used to verify all non-repetitive funds
transfer instructions received via untested facsimile or phone. This
procedure requires Clients to designate individuals as authorized initiators
and authorized verifiers. State Street will verify that the instruction
contains the signature of an authorized person and prior to execution, will
contact someone other than the originator at the Client's location to
authenticate the instruction.
SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE THE
CAPABILITY TO USE OTHER SECURITY PROCEDURES.
- -REPETITIVE WIRES
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and
currency amount are variable, a repetitive wire may be implemented.
Repetitive wires will be subject to a mutually agreed upon limit. If the
payment order exceeds the established limit, the instruction will be
confirmed by telephone prior to execution. Telephone confirmation is used to
establish this process. Repetitive wire instructions must be reconfirmed
annually.
THIS ALTERNATIVE IS RECOMMENDED WHENEVER FUNDS ARE FREQUENTLY TRANSFERRED
BETWEEN THE SAME TWO ACCOUNTS.
- -TRANSFERS INITIATED BY FACSIMILE
The Client faxes wire transfer instructions directly to State Street Mutual
Fund Services. Standard security procedure requires the use of a random
number test key for all transfers. Every six months the Client receives test
key logs from State Street. The test key contains alpha-numeric characters,
which the Client puts on each document faxed to State Street. This procedure
ensures all wire instructions received via fax are authorized by the Client.
WE PROVIDE THIS OPTION FOR CLIENTS WHO WISH TO BATCH WIRE INSTRUCTIONS AND
TRANSMIT THESE AS A GROUP TO STATE STREET MUTUAL FUND SERVICES ONCE OR
SEVERAL TIMES A DAY.
<PAGE>
FUNDS TRANSFER ADDENDUM [LOGO]
- -AUTOMATED CLEARING HOUSE (ACH)
State Street receives an automated transmission or a magnetic tape from a
Client for the initiation of payment (credit) or collection (debit)
transactions through the ACH network. The transactions contained on each
transmission or tape must be authenticated by the Client. Clients using ACH
must select one or more of the following delivery options:
- -GLOBAL HORIZON INTERCHANGE AUTOMATED CLEARING HOUSE SERVICE
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic
transmissions in standard NACHA formats.
- -Transmission from Client PC to State Street Mainframe with Telephone
Callback
- -Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback
- -Transmission from DST Systems to State Street Mainframe with Encryption
- -Magnetic Tape Delivered to State Street with Telephone Callback
State Street is hereby instructed to accept funds transfer instructions only
via the delivery methods and security procedures indicated. The selected
delivery methods and security procedure(s) will be effective _________________
for payment orders initiated by our organization.
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
_____________________________________ ______________________________________
Name Name
_____________________________________ ______________________________________
Address Address
_____________________________________ ______________________________________
City/State/Zip Code City/State/Zip Code
_____________________________________ ______________________________________
Telephone Number Telephone Number
_____________________________________ ______________________________________
Facsimile Number Facsimile Number
_____________________________________
SWIFT Number
_____________________________________
Telex Number
<PAGE>
FUNDS TRANSFER ADDENDUM [LOGO]
INSTRUCTION(S)
TELEPHONE CONFIRMATION
FUND RWB FUNDS - INVESTMENT TRUST
----------------------------------------------------------------
INVESTMENT ADVISER RWB ADVISORY SERVICES INC. [AND SUB-ADVISER, DIMENSIONAL
FUND ADVISORS, INC.]
AUTHORIZED INITIATORS
Please Type or Print
PLEASE PROVIDE A LISTING OF FUND OFFICERS OR OTHER INDIVIDUALS ARE CURRENTLY
AUTHORIZED TO INITIATE WIRE TRANSFER INSTRUCTIONS TO STATE STREET:
NAME TITLE (Specify whether position SPECIMEN SIGNATURE
is with Fund or Investment
Adviser)
_____________________ _______________________________ __________________
_____________________ _______________________________ __________________
_____________________ _______________________________ __________________
_____________________ _______________________________ __________________
_____________________ _______________________________ __________________
AUTHORIZED VERIFIERS
Please Type or Print
PLEASE PROVIDE A LISTING OF FUND OFFICERS OF OTHER INDIVIDUALS WHO WILL BE
CALLED BACK TO VERIFY THE INITIATION OF REPETITIVE WIRES OF $10 MILLION OR
MORE AND ALL NON REPETITIVE WIRE INSTRUCTIONS:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
_____________________ _________________________ __________________________
_____________________ _________________________ __________________________
_____________________ _________________________ __________________________
_____________________ _________________________ __________________________
_____________________ _________________________ __________________________
<PAGE>
<TABLE>
<CAPTION>
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada State Street Trust Company Canada --
Chile Citibank, N.A. Deposito Central de Valores S.A.
People=s Republic The Hongkong and Shanghai --
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Costa Rica Banco BCT S.A. --
Croatia Privredna Banka Zagreb d.d --
Cyprus The Cyprus Popular Bank Ltd. --
Czech Republic Ceskoslovenska Obchodni --
Banka, A.S.
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Merita Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A. The Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Iceland Icebank Ltd.
India Deutsche Bank AG --
The Hongkong and Shanghai
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques --
en Cote d=Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant --
Bank Ltd.
Japan The Fuji Bank, Limited Japan Securities Depository Center
Sumitomo Bank, Ltd.
Jordan British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking
Corporation Limited
Latvia JSC Hansabank-Latvija --
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Lebanon British Bank of the Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank --
Malaysia Berhad
Mauritius The Hongkong and Shanghai --
Banking Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa -
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group --
(New Zealand) Limited
Norway Christiania Bank og --
Kreditkasse
Oman British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Poland Citibank (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues --
Romania ING Bank N.V. --
Russia Credit Suisse First Boston AO, Moscow --
(as delegate of Credit Suisse
First Boston, Zurich)
Singapore The Development Bank --
of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S. --
Slovenia Bank Austria d.d. Ljubljana --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai --
Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AG --
Taiwan - R.O.C. Central Trust of China --
Thailand Standard Chartered Bank --
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Trinidad & Tobago Republic Bank Limited --
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. --
Ottoman Bank
Ukraine ING Bank, Ukraine --
United Kingdom State Street Bank and Trust Company, --
London Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
</TABLE>
6
<PAGE>
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and
Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de
Depot et de Virement de Titres S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e
Custodia (CBLC)
Bolsa de Valores de Rio de Janeiro
All SSB CLIENTS PRESENTLY USE CBLC
Central de Custodia e de
Liquidacao Financeira de Titulos
Bulgaria Central Depository AD
Bulgarian National Bank
Canada The Canadian Depository
for Securities Limited
People's Republic Shanghai Securities Central
of China Clearing and Registration Corporation
Shenzhen Securities Central
Clearing Co., Ltd.
Costa Rica Central de Valores S.A. (CEVAL)
* Mandatory depositories include entities for which use is mandatory as a 1
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Czech Republic Stredisko cennych papiru
Czech National Bank
Denmark Vaerdipapircentralen (the Danish
Securities Center)
Egypt Misr Company for Clearing,
Settlement, and Central Depository
Estonia Eesti Vaartpaberite
Keskdepositoorium
Finland The Finnish Central Securities
Depository
France Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany Deutsche Borse Clearing AG
Greece The Central Securities Depository
(Apothetirion Titlon AE)
Hong Kong The Central Clearing and
Settlement System
Central Money Markets Unit
Hungary The Central Depository and
Clearing House (Budapest) Ltd.
(KELER)[MANDATORY FOR GOV'T BONDS
ONLY; SSB DOES NOT USE FOR OTHER
SECURITIES]
India The National Securities Depository
Limited
* Mandatory depositories include entities for which use is mandatory as a 2
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Indonesia Bank Indonesia
Ireland Central Bank of Ireland
Securities Settlement Office
Israel The Tel Aviv Stock Exchange Clearing
House Ltd.
Bank of Israel
Italy Monte Titoli S.p.A.
Banca d'Italia
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica The Jamaican Central Securities Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia The Latvian Central Depository
Lebanon The Custodian and Clearing Center of
Financial Instruments for Lebanon
and the Middle East (MIDCLEAR) S.A.L.
The Central Bank of Lebanon
* Mandatory depositories include entities for which use is mandatory as a 3
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Lithuania The Central Securities Depository of
Lithuania
Malaysia The Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping
System
Mauritius The Central Depository & Settlement
Co. Ltd.
Mexico S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de
Valores)
Morocco Maroclear
The Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
De Nederlandsche Bank N.V.
New Zealand New Zealand Central Securities
Depository Limited
Norway Verdipapirsentralen (the Norwegian
Registry of Securities)
Oman Muscat Securities Market
Pakistan Central Depository Company of Pakistan
Limited
Peru Caja de Valores y Liquidaciones S.A.
(CAVALI)
* Mandatory depositories include entities for which use is mandatory as a 4
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Philippines The Philippines Central Depository, Inc.
The Registry of Scripless Securities
(ROSS) of the Bureau of the Treasury
Poland The National Depository of Securities
(Krajowy Depozyt Papierow Wartos ciowych)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios (Central)
Romania National Securities Clearing, Settlement and
Depository Co.
Bucharest Stock Exchange Registry Division
Singapore The Central Depository (Pte)
Limited
Monetary Authority of Singapore
Slovak Republic Stredisko Cennych Papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana,
Central de Anotaciones en Cuenta
* Mandatory depositories include entities for which use is mandatory as a 5
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Sri Lanka Central Depository System
(Pvt) Limited
Sweden Vardepapperscentralen AB
(the Swedish Central Securities Depository)
Switzerland Schweizerische Effekten - Giro AG
Taiwan - R.O.C. The Taiwan Securities Central
Depository Co., Ltd.
Thailand Thailand Securities Depository
Company Limited
Tunisia Societe Tunisienne Interprofessionelle de
Compensation et de Depot de
Valeurs Mobilieres
Central Bank of Tunisia
Tunisian Treasury
Turkey Takas ve Saklama Bankasi A.S.
(TAKASBANK)
Central Bank of Turkey
Ukraine The National Bank of Ukraine
United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office
Uruguay Central Bank of Uruguay
* Mandatory depositories include entities for which use is mandatory as a 6
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Venezuela Central Bank of Venezuela
Zambia Lusaka Central Depository Limited
Bank of Zambia
* Mandatory depositories include entities for which use is mandatory as a 7
matter of law or effectively mandatory as a matter of market practice.
<PAGE>
SCHEDULE C
MARKET INFORMATION
<TABLE>
<CAPTION>
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
(FREQUENCY)
<S> <C>
THE GUIDE TO CUSTODY IN WORLD MARKETS An overview of safekeeping and settlement practices and
(annually) procedures in each market in which State Street Bank
and Trust Company offers custodial services.
GLOBAL CUSTODY NETWORK REVIEW Information relating to the operating history and
(annually) structure of depositories and subcustodians located in
the markets in which State Street Bank and Trust
Company offers custodial services, including
transnational depositories.
GLOBAL LEGAL SURVEY With respect to each market in which State Street Bank
(annually) and Trust Company offers custodial services, opinions
relating to whether local law restricts (i) access of a
fund's independent public accountants to books and
records of a Foreign Sub-Custodian or Foreign
Securities System, (ii) the Fund's ability to recover
in the event of bankruptcy or insolvency of a Foreign
Sub-Custodian or Foreign Securities System, (iii) the
Fund's ability to recover in the event of a loss by a
Foreign Sub-Custodian or Foreign Securities System, and
(iv) the ability of a foreign investor to convert cash
and cash equivalents to U.S. dollars.
SUBCUSTODIAN AGREEMENTS Copies of the subcustodian contracts State Street Bank
(annually) and Trust Company has entered into with each
subcustodian in the markets in which State Street Bank
and Trust Company offers subcustody services to its US
mutual fund clients.
Network Bulletins (weekly): Developments of interest to investors in the markets in
which State Street Bank and Trust Company offers
custodial services.
Foreign Custody Advisories (as
necessary): With respect to markets in which State Street Bank and
Trust Company offers custodial services which exhibit
special custody risks, developments which may impact
State Street's ability to deliver expected levels of
service.
</TABLE>
<PAGE>
Exhibit 23(h)(i)
SUB-ADMINISTRATION AGREEMENT
Agreement dated as of ________, 1999 among RWB Advisory Services, Inc.
(the "Company"), SA Funds - Investment Trust (the "Trust") and State Street Bank
and Trust Company, a Massachusetts trust company (the "Bank").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company Acts as administrator to the Trust;
WHEREAS, the Company and the Trust desire to retain the Bank to
furnish certain administrative services to the Trust, and the Bank is willing to
furnish such services, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF BANK
The Company and the Trust hereby appoint the Bank to act as
sub-administrator with respect to the Trust for purposes of providing certain
administrative services for the period and on the terms set forth in this
Agreement. The Bank accepts such appointment and agrees to render the services
stated herein.
The Trust will initially consist of the portfolio(s) and/or class(es)
of shares (each an "Investment Fund") listed in Schedule A to this Agreement.
In the event that the Trust establishes one or more additional Investment Funds
with respect to which the Company and the Trust wishes to retain the Bank to act
as administrator hereunder, the Company and the Trust shall notify the Bank in
writing. Upon written acceptance by the Bank, such Investment Fund shall become
subject to the provisions of this Agreement to the same extent as the existing
Investment Funds, except to the extent that such provisions (including those
relating to the compensation and expenses payable by the Trust and its
Investment Funds) may be modified with respect to each additional Investment
Fund in writing by the Company, the Trust and the Bank at the time of the
addition of the Investment Fund.
2. DELIVERY OF DOCUMENTS
The Trust will promptly deliver to the Bank copies of each of the
following documents and all future amendments and supplements, if any:
a. The Trust's Declaration of Trust;
b. The Trust's currently effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and the 1940
Act and the Trust's Prospectus(es) and Statement(s) of Additional
Information relating to all
<PAGE>
Investment Funds and all amendments and supplements thereto as in
effect from time to time;
c. Certified copies of the resolutions of the Board of Trustees of
the Trust (the "Board") authorizing (1) the Trust to enter into
this Agreement and (2) certain individuals on behalf of the Trust
to (a) give instructions to the Bank pursuant to this Agreement
and (b) sign checks and pay expenses;
d. A copy of the investment advisory agreement between the Trust and
its investment adviser, including any sub-advisory agreement
between the Trust and its investment sub-adviser, if any; and
e. Such other certificates, documents or opinions which the Bank
may, in its reasonable discretion, deem necessary or appropriate
in the proper performance of its duties.
3. REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Trust that:
a. It is a Massachusetts trust company, duly organized and existing
under the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority to carry on its business
in The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Bank's ability to perform its
duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of the Bank or any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to the Bank that:
a. It is a business trust, duly organized, existing and in good
standing under the laws of the State of Delaware;
b. It has the corporate power and authority under applicable laws
and by its Declaration of Trust and by-laws to enter into and
perform this Agreement;
2
<PAGE>
c. All requisite proceedings have been taken to authorize it to
enter into and perform this Agreement;
d. It is an investment company properly registered under the 1940
Act;
e. A registration statement under the 1933 Act and the 1940 Act has
been filed and will be effective and remain effective during the
term of this Agreement. The Trust also warrants to the Bank that
as of the effective date of this Agreement, all necessary filings
under the securities laws of the states in which the Trust offers
or sells its shares have been made;
f. No legal or administrative proceedings have been instituted or
threatened which would impair the Trust's ability to perform its
duties and obligations under this Agreement;
g. Its entrance into this Agreement will not cause a material breach
or be in material conflict with any other agreement or obligation
of the Trust or any law or regulation applicable to it; and
h. As of the close of business on the date of this Agreement, the
Trust is authorized to issue shares of beneficial interest, and
it will initially offer shares, in the authorized amounts as set
forth in Schedule A to this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Bank that:
a. It is a corporation, duly organized, existing and in good
standing under the laws of _____________;
b. It has the power and authority under _________________ law and by
its charter and by-laws to enter into and perform this Agreement;
c. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Company's ability to perform
its duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of the Company or any law or regulation applicable to
it.
3
<PAGE>
6. ADMINISTRATION SERVICES
The Bank shall provide the following services, in each case, subject
to the control, supervision and direction of the Trust and the Company and the
review and comment by the Trust's and the Company's auditors and legal counsel
and in accordance with procedures which may be established from time to time
between the Trust, the Company and the Bank:
a. Oversee the determination and publication of the Trust's net
asset value in accordance with the Trust's policy as adopted from
time to time by the Board;
b. Oversee the maintenance by the Trust's custodian of certain books
and records of the Trust as required under Rule 31a-1(b) of the
1940 Act;
c. Prepare the Trust's federal, state and local income tax returns
for review by the Trust's independent accountants and filing by
the Trust's treasurer;
d. Review calculation, submit for approval by officers of the Trust
and arrange for payment of the Trust's expenses;
e. Prepare for review and approval by officers of the Trust
financial information for the Trust's semi-annual and annual
reports, proxy statements and other communications required or
otherwise to be sent to Trust shareholders, and arrange for the
printing and dissemination of such reports and communications to
shareholders;
f. Prepare for review by an officer of and legal counsel for the
Trust the Trust's periodic financial reports required to be filed
with the Securities and Exchange Commission ("SEC") on Form N-SAR
and financial information required by Form N-1A and such other
reports, forms or filings as may be mutually agreed upon;
g. Prepare reports relating to the business and affairs of the Trust
as may be mutually agreed upon and not otherwise prepared by the
Trust's investment adviser, custodian, legal counsel or
independent accountants;
h. Make such reports and recommendations to the Board concerning the
performance of the independent accountants as the Board may
reasonably request;
i. Make such reports and recommendations to the Board concerning the
performance and fees of the Trust's custodian and transfer and
dividend disbursing agent ("Transfer Agent") as the Board may
reasonably request or deems appropriate;
j. Oversee and review calculations of fees paid to the Trust's
investment adviser, custodian and Transfer Agent;
4
<PAGE>
k. Consult with the Trust's officers, independent accountants, legal
counsel, custodian and Transfer Agent in establishing the
accounting policies of the Trust;
l. Respond to, or refer to the Trust's officers or Transfer Agent,
shareholder inquiries relating to the Trust;
m. Provide periodic testing of portfolios to assist the Trust's
investment adviser in complying with Internal Revenue Code
mandatory qualification requirements, the requirements of the
1940 Act and Trust prospectus limitations as may be mutually
agreed upon;
n. Review and provide assistance on shareholder communications;
o. Maintain general corporate calendar;
p. Maintain copies of the Trust's charter and by-laws;
q. File annual and semi-annual shareholder reports with the
appropriate regulatory agencies; review text of "President's
letters" to shareholders and "Management's Discussion of Trust
Performance" (which shall also be subject to review by the
Trust's legal counsel);
r. Organize, attend and prepare minutes of shareholder meetings;
s. Provide consultation on regulatory matters relating to portfolio
management, Trust operations and any potential changes in the
Trust's investment policies, operations or structure; act as
liaison to legal counsel to the Trust and, where applicable, to
legal counsel to the Trust's independent Board members;
t. Maintain continuing awareness of significant emerging regulatory
and legislative developments which may affect the Trust, update
the Board and the investment adviser on those developments and
provide related planning assistance where requested or
appropriate;
u. Develop or assist in developing guidelines and procedures to
improve overall compliance by the Trust and its various agents;
v. Counsel and assist the Trust in the handling of routine
regulatory examinations and work closely with the Trust's legal
counsel in response to any non-routine regulatory matters;
Subject to review and comment by the Trust's legal counsel:
w. Prepare and file with the SEC amendments to the Trust's
registration statement, including updating the Prospectus and
Statement of Additional Information, where applicable;
5
<PAGE>
x. Prepare and file with the SEC proxy statements; provide
consultation on proxy solicitation matters;
y. Prepare agenda and background materials for Board meetings, make
presentations where appropriate, prepare minutes and follow-up on
matters raised at Board meetings; and
z. Prepare and file with the SEC Rule 24f-2 notices.
aa. Perform Blue Sky services pursuant to the specific instructions
of the Trust and as detailed in Schedule B to this Agreement.
The Bank shall provide the office facilities and the personnel required by it to
perform the services contemplated herein.
7. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Bank shall receive from the Company such compensation for the
Bank's services provided pursuant to this Agreement as may be agreed to from
time to time in a written fee schedule approved by the parties and initially set
forth in the Fee Schedule to this Agreement. The fees are accrued daily and
billed monthly and shall be due and payable upon receipt of the invoice. The
Trust shall pay to the Bank any and all compensation and reimbursement of
expense that are not paid to the Bank by the Company. Upon the termination of
this Agreement before the end of any month, the fee for the part of the month
before such termination shall be prorated according to the proportion which such
part bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. In addition, the Company shall reimburse the
Bank for its out-of-pocket costs incurred in connection with this Agreement.
The Company agrees promptly to reimburse the Bank for any equipment
and supplies specially ordered by or for the Trust, or the Company, through the
Bank and for any other expenses not contemplated by this Agreement that the Bank
may incur on the Trust's or Company's behalf, at the Trust's or the Company's
request or with the Trust's or the Company's consent.
The Trust will bear all expenses that are incurred in its operation
and not specifically assumed by the Bank. Expenses to be borne by the Trust,
include, but are not limited to: organizational expenses; cost of services of
independent accountants and outside legal and tax counsel (including such
counsel's review of the Trust's registration statement, proxy materials, federal
and state tax qualification as a regulated investment company and other reports
and materials prepared by the Bank under this Agreement); cost of any services
contracted for by the Trust directly from parties other than the Bank; cost of
trading operations and brokerage fees, commissions and transfer taxes in
connection with the purchase and sale of securities for the Trust; investment
advisory fees; taxes, insurance premiums and other fees and expenses applicable
to its operation; costs incidental to any meetings of shareholders including,
but not limited to, legal and accounting fees, proxy filing fees and the costs
of preparation, filing (edgarization), printing and mailing of any proxy
materials; costs incidental to Board meetings, including fees and expenses of
Board members; the salary and expenses of any officer, director\trustee or
employee of the Trust; costs incidental to the preparation, filing
(edgarization), printing and distribution of the Trust's registration statements
and any amendments thereto and shareholder reports; cost of typesetting
6
<PAGE>
and printing of prospectuses; cost of preparation and filing of the Trust's
tax returns, Form N-1A or N-2 and Form N-SAR, and all notices, registrations
and amendments associated with applicable federal and state tax and
securities laws; all applicable registration fees and filing fees required
under federal and state securities laws; fidelity bond and directors' and
officers' liability insurance; and cost of independent pricing services used
in computing the Trust's net asset value.
The Bank is authorized to and may employ or associate with such person or
persons as the Bank may deem desirable to assist it in performing its duties
under this Agreement; provided, however, that the compensation of such person or
persons shall be paid by the Bank and that the Bank shall be as fully
responsible to the Trust for the acts and omissions of any such person or
persons as it is for its own acts and omissions.
8. INSTRUCTIONS AND ADVICE
At any time, the Bank may apply to any officer of the Trust for
instructions and may consult with its own legal counsel or outside counsel for
the Trust or the independent accountants for the Trust at the expense of the
Trust, with respect to any matter arising in connection with the services to be
performed by the Bank under this Agreement. The Bank shall not be liable, and
shall be indemnified by the Trust, for any action taken or omitted by it in good
faith in reliance upon any such instructions or advice or upon any paper or
document believed by it to be genuine and to have been signed by the proper
person or persons. The Bank shall not be held to have notice of any change of
authority of any person until receipt of written notice thereof from the Trust.
Nothing in this paragraph shall be construed as imposing upon the Bank any
obligation to seek such instructions or advice, or to act in accordance with
such advice when received.
9. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement and, except as otherwise provided under
Section 6, shall have no responsibility for the actions or activities of any
other party, including other service providers. The Bank shall have no
liability for any error of judgment or mistake of law or for any loss or damage
resulting from the performance or nonperformance of its duties hereunder unless
solely caused by or resulting from the gross negligence or willful misconduct of
the Bank, its officers or employees. The Bank shall not be liable for any
special, indirect, incidental, or consequential damages of any kind whatsoever
(including, without limitation, attorneys' fees) under any provision of this
Agreement or for any such damages arising out of any act or failure to act
hereunder. In any event, the Bank's liability under this Agreement shall be
limited to its total annual compensation earned and fees paid hereunder during
the preceding twelve months for any liability or loss suffered by the Trust
including, but not limited to, any liability relating to qualification of the
Trust as a regulated investment company or any liability relating to the Trust's
compliance with any federal or state tax or securities statute, regulation or
ruling.
The Bank shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its control, including without
limitation, work stoppage, power or other mechanical failure, computer virus,
natural disaster, governmental action or communication disruption.
7
<PAGE>
The Company and the Trust shall indemnify and hold the Bank harmless
from all loss, cost, damage and expense, including reasonable fees and expenses
for counsel, incurred by the Bank resulting from any claim, demand, action or
suit in connection with the Bank's acceptance of this Agreement, any action or
omission by it in the performance of its duties hereunder, or as a result of
acting upon any instructions reasonably believed by it to have been duly
authorized by the Company and the Trust, provided that this indemnification
shall not apply to actions or omissions of the Bank, its officers or employees
in cases of its or their own gross negligence or willful misconduct.
The indemnification contained herein shall survive the termination of
this Agreement.
10. CONFIDENTIALITY
The Bank agrees that, except as otherwise required by law or in
connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Trust or its shareholders or shareholder accounts and
will not disclose the same to any person except at the request or with the
written consent of the Trust.
11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Trust assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations applicable to
it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Bank agrees that all records which it maintains for the Trust shall at all
times remain the property of the Trust, shall be readily accessible during
normal business hours, and shall be promptly surrendered upon the termination of
the Agreement or otherwise on written request. The Bank further agrees that all
records which it maintains for the Trust pursuant to Rule 31a-1 under the 1940
Act will be preserved for the periods prescribed by Rule 31a-2 under the 1940
Act unless any such records are earlier surrendered as provided above. Records
shall be surrendered in usable machine-readable form.
12. SERVICES NOT EXCLUSIVE
The services of the Bank to the Trust are not to be deemed exclusive,
and the Bank shall be free to render similar services to others. The Bank
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Trust from time to time, have no
authority to act or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
13. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on the date of its execution and
shall remain in full force and effect from the effective date for an initial
term of three years from the effective date and shall automatically continue in
full force and effect after such initial term unless either party terminates
this Agreement by written notice to the other party at least sixty (60) days
prior to the expiration of the initial term. Either party may terminate this
Agreement at any time after the initial term upon at least sixty (60) days'
prior written notice to the other party. Termination of this Agreement with
respect to any given Investment Fund shall in no way affect the continued
validity of this Agreement with respect to any other Investment Fund. Upon
termination of this Agreement, the Company shall pay to the Bank such
8
<PAGE>
compensation and any reimbursable expenses as may be due under the terms hereof
as of the date of such termination, including reasonable out-of-pocket expenses
associated with such termination. Should this Agreement be terminated by the
Company or the Trust prior to the end of the initial three year term, the
Company shall pay to the Bank any fees which the Bank may have waived during the
initial three year term. The Trust shall pay to the Bank any and all
compensation and reimbursement of expense that are not paid to the Bank by the
Company. This Agreement may be modified or amended from time to time by mutual
written agreement of the parties hereto.
14. NOTICES
Any notice or other communication authorized or required by this
Agreement to be given to either party shall be in writing and deemed to have
been given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other): If to the
Company: RWB Advisory Services, Inc., 1190 Saratoga Avenue, Suite 200, San Jose,
CA 95129, Attn: Alex Potts, (408)247-1108 if to the Trust: SA Funds - Investment
Trust, 1190 Saratoga Avenue, Suite 200, San Jose, CA 95129, Attn: Alex Potts,
fax (408) 247-1108; if to the Bank: State Street Bank and Trust Company, 2
Avenue de Lafayette, Boston, Massachusetts 02111-1724, Attn: Fund
Administration Legal Department, fax: (617)662-3805.
15. NON-ASSIGNABILITY
This Agreement shall not be assigned by any party hereto without the
prior consent in writing of the other two parties, except that the Bank may
assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by or under common control with
the Bank.
16. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
the Trust the Company and the Bank and their respective successors and permitted
assigns.
17. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all previous
representations, warranties or commitments regarding the services to be
performed hereunder whether oral or in writing.
18. WAIVER
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver must be in writing signed
by the waiving party.
9
<PAGE>
19. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the
balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
20. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
21. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
SA FUNDS-INVESTMENT TRUST
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
RWB ADVISORY SERVICES, INC.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
STATE STREET BANK AND TRUST COMPANY
By:
--------------------------------
Name: Kathleen C. Cuocolo
--------------------------------
Title: Senior Vice President
--------------------------------
10
<PAGE>
ADMINISTRATION AGREEMENT
SA FUNDS
SCHEDULE A
LISTING OF INVESTMENT FUNDS AND AUTHORIZED SHARES
Investment Fund Authorized Shares
SA Fixed Income Fund Unlimited
SA U.S. Market Fund Unlimited
SA U.S. HBtM Fund Unlimited
SA U.S. Small Fund Unlimited
SA International HBtM Fund Unlimited
SA International Small Fund Unlimited
11
<PAGE>
ADMINISTRATION AGREEMENT
SA FUNDS
SCHEDULE B
NOTICE FILING WITH
STATE SECURITIES BANKS
AT THE SPECIFIC DIRECTION OF THE TRUST, THE BANK WILL PREPARE REQUIRED
DOCUMENTATION AND MAKE NOTICE FILINGS IN ACCORDANCE WITH THE SECURITIES LAWS OF
EACH JURISDICTION IN WHICH TRUST SHARES ARE TO BE OFFERED OR SOLD PURSUANT TO
INSTRUCTIONS GIVEN TO THE BANK BY THE TRUST.
THE TRUST SHALL BE SOLELY RESPONSIBLE FOR THE DETERMINATION (i) OF THOSE
JURISDICTIONS IN WHICH NOTICE FILINGS ARE TO BE SUBMITTED AND (ii) THE NUMBER OF
TRUST SHARES TO BE PERMITTED TO BE SOLD IN EACH SUCH JURISDICTION. IN THE EVENT
THAT THE BANK BECOMES AWARE OF (a) THE SALE OF TRUST SHARES IN A JURISDICTION IN
WHICH NO NOTICE FILING HAS BEEN MADE OR (b) THE SALE OF TRUST SHARES IN EXCESS
OF THE NUMBER OF TRUST SHARES PERMITTED TO BE SOLD IN SUCH JURISDICTION, THE
BANK SHALL REPORT SUCH INFORMATION TO THE TRUST, AND IT SHALL BE THE TRUST'S
RESPONSIBILITY TO DETERMINE APPROPRIATE CORRECTIVE ACTION AND INSTRUCT THE BANK
WITH RESPECT THERETO.
The Blue Sky services shall consist of the following:
1. Filing of Trust's Initial Notice Filings, as directed by the Trust;
2. Filing of Trust's renewals and amendments as required;
3. Filing of amendments to the Trust's registration statement where
required;
4. Filing Trust sales reports where required;
5. Payment at the expense of the Trust of all Trust Notice Filing fees;
6. Filing the Prospectuses and Statements of Additional Information and
any amendments or supplements thereto where required;
7. Filing of annual reports and proxy statements where required; and
8. The performance of such additional services as the Bank and the Trust
may agree upon in writing.
Unless otherwise specified in writing by the Bank, Blue Sky services by the Bank
shall not include determining the availability of exemptions under a
jurisdiction's blue sky law. Any such determination shall be made by the Trust
or its legal counsel. In connection with the services described herein, the
Trust shall issue in favor of the Bank a power of attorney to submit Notice
Filings on behalf of the Trust, which power of attorney shall be substantially
in the form of Exhibit I attached hereto.
12
<PAGE>
EXHIBIT I
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of _________________, 1998 that SA Funds -
Investment Trust with principal offices at 1190 Saratoga Avenue, Suite 200, San
Jose, CA 95129 (the "Trust") makes, constitutes, and appoints STATE STREET BANK
AND TRUST COMPANY (the "Bank") with principal offices at 225 Franklin Street,
Boston, Massachusetts its lawful attorney-in-fact for it to do as if it were
itself acting, the following:
1. REGISTRATION OF TRUST SHARES. The power to register shares of the Trust in
each jurisdiction in which Trust shares are offered or sold and in
connection therewith the power to prepare, execute, and deliver and file
any and all Trust applications, including without limitation, applications
to register shares, consents, including consents to service of process,
reports, including without limitation, all periodic reports, claims for
exemption, or other documents and instruments now or hereafter required or
appropriate in the judgment of the Bank in connection with the registration
of Trust shares.
2. AUTHORIZED SIGNERS. Pursuant to this Limited Power of Attorney, individuals
holding the titles of Officer, Blue Sky Manager, or Senior Blue Sky Bank at
the Bank shall have authority to act on behalf of the Trust with respect to
item 1 above.
The execution of this limited power of attorney shall be deemed coupled with an
interest and shall be revocable only upon receipt by the Bank of such
termination of authority. Nothing herein shall be construed to constitute the
appointment of the Bank as or otherwise authorize the Bank to act as an officer,
director or employee of the Trust.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.
SA FUNDS - Investment Trust
By:
-------------------------
Name:
-----------------------
Title:
----------------------
13
<PAGE>
DRAFT 2/19/99
Exhibit 23(h)(ii)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
RWB FUND - INVESTMENT TRUST
and
STATE STREET BANK AND TRUST COMPANY
4TRSTSER.DOC
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Terms of Appointment and Duties. . . . . . . . . . . . . . . . . . . . 1
2. Third Party Administrators for Defined Contribution Plans. . . . . . . 4
3. Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Representations and Warranties of the Transfer Agent . . . . . . . . . 5
5. Representations and Warranties of the Fund . . . . . . . . . . . . . . 6
6. Wire Transfer Operating Guidelines . . . . . . . . . . . . . . . . . . 6
7. Data Access and Proprietary Information. . . . . . . . . . . . . . . . 8
8. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . .10
9. Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . .11
10. Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
11. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
12. Covenants of the Fund and the Transfer Agent . . . . . . . . . . . . .12
13. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . .13
14. Assignment and Third Party Beneficiaries . . . . . . . . . . . . . . .13
15. Subcontractors . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
16. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
17. Additional Funds . . . . . . . . . . . . . . . . . . . . . . . . . . .16
18. Limitations of Liability of the Trustees and Shareholders. . . . . . .16
</TABLE>
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the day of , 1999 by and between RWB FUND -
INVESTMENT TRUST, a Delaware business trust, having its principal office and
place of business at Reinhardt Werba Bowen Advisory Services, 1190 Saratoga
Avenue, Suite 200, San Jose, California 95120 (the "Fund"), and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company having its principal
office and place of business at 225 Franklin Street, Boston, Massachusetts 02110
(the "Transfer Agent").
WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS, the Fund intends to initially offer shares in six (6) series, such
series shall be named in the attached Schedule A which may be amended by the
parties from time to time (each such series, together with all other series
subsequently established by the Fund and made subject to this Agreement in
accordance with Article 13, being herein referred to as a "Portfolio", and
collectively as the "Portfolios"); and
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Transfer
Agent as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities, and the
Transfer Agent desires to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
l. TERMS OF APPOINTMENT AND DUTIES
1.1 TRANSFER AGENCY SERVICES. Subject to the terms and conditions set forth
in this Agreement, the Fund, on behalf of the Portfolios, hereby employs
and appoints the Transfer Agent to act as, and the Transfer Agent agrees
to act as its transfer agent for the Fund's authorized and issued shares
of its beneficial interest, $ par value, ("Shares"), dividend
disbursing agent, custodian of certain retirement plans and agent in
connection with any accumulation, open-account or similar plan provided
to the shareholders of each of the respective Portfolios of the Fund
("Shareholders") and set out in the currently effective prospectus and
statement of additional information ("prospectus") of the Fund on behalf
of the applicable Portfolio, including without limitation any periodic
investment plan or periodic withdrawal program. In accordance with
procedures established from time to time by agreement between the Fund
on behalf of each of the Portfolios, as applicable and the Transfer
Agent, the Transfer Agent agrees that it will perform the following
services:
(a) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to the
Custodian of the Fund authorized pursuant to the Declaration of Trust of
the Fund (the "Custodian");
(b) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
<PAGE>
(c) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to the
Custodian;
(d) In respect to the transactions in items (a), (b) and (c) above,
the Transfer Agent shall execute transactions directly with
broker-dealers authorized by the Fund;
(e) At the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemption, pay over or cause to be
paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;
(f) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(g) Prepare and transmit payments for dividends and distributions
declared by the Fund on behalf of the applicable Portfolio;
(h) Issue replacement certificates for those certificates alleged to
have been lost, stolen or destroyed upon receipt by the Transfer Agent
of indemnification satisfactory to the Transfer Agent and protecting the
Transfer Agent and the Fund, and the Transfer Agent at its option, may
issue replacement certificates in place of mutilated stock certificates
upon presentation thereof and without such indemnity;
(i) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(j) Record the issuance of Shares of the Fund and maintain pursuant
to SEC Rule 17Ad-10(e) a record of the total number of Shares of the
Fund which are authorized, based upon data provided to it by the Fund,
and issued and outstanding. The Transfer Agent shall also provide the
Fund on a regular basis with the total number of Shares which are
authorized and issued and outstanding and shall have no obligation, when
recording the issuance of Shares, to monitor the issuance of such Shares
or to take cognizance of any laws relating to the issue or sale of such
Shares, which functions shall be the sole responsibility of the Fund.
1.2 ADDITIONAL SERVICES. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, the
Transfer Agent shall perform the following services:
(a) OTHER CUSTOMARY SERVICES. Perform the customary services of a
transfer agent, dividend disbursing agent, custodian of certain
retirement plans and, as relevant, agent in connection with
accumulation, open-account or similar plan (including without limitation
any periodic investment plan or periodic withdrawal program), including
but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing Shareholder proxies, Shareholder
reports and prospectuses to current Shareholders,
2
<PAGE>
withholding taxes on U.S. resident and non-resident alien accounts,
preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions
by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable transactions
in Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.
(b) CONTROL BOOK (ALSO KNOWN AS "SUPER SHEET"). Maintain a daily
record and produce a daily report for the Fund of all transactions and
receipts and disbursements of money and securities and deliver a copy of
such report for the Fund for each business day to the Fund no later than
9:00 AM Eastern Time, or such earlier time as the Fund may reasonably
require, on the next business day;
(c) "BLUE SKY" REPORTING. The Fund shall (i) identify to the
Transfer Agent in writing those transactions and assets to be treated as
exempt from blue sky reporting for each State; and (ii) verify the
establishment of transactions for each State on the system prior to
activation and thereafter monitor the daily activity for each State.
The responsibility of the Transfer Agent for the Fund's blue sky State
registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and providing a
system which will enable the Fund to monitor the total number of Shares
sold in each State;
(d) NATIONAL SECURITIES CLEARING CORPORATION (THE "NSCC"). (i)
accept and effectuate the registration and maintenance of accounts
through Networking and the purchase, redemption, transfer and exchange
of shares in such accounts through Fund/SERV (networking and Fund/SERV
being programs operated by the NSCC on behalf of NSCC's participants,
including the Fund), in accordance with, instructions transmitted to and
received by the Transfer Agent by transmission from NSCC on behalf of
broker-dealers and banks which have been established by, or in
accordance with the instructions of authorized persons, as hereinafter
defined on the dealer file maintained by the Transfer Agent; (ii) issue
instructions to Fund's banks for the settlement of transactions between
the Fund and NSCC (acting on behalf of its broker-dealer and bank
participants); (iii) provide account and transaction information from
the affected Fund's records on DST Systems, Inc. computer system TA2000
("TA2000 System") in accordance with NSCC's Networking and Fund/SERV
rules for those broker-dealers; and (iv) maintain Shareholder accounts
on TA2000 System through Networking.
(e) NEW PROCEDURES. New procedures as to who shall provide certain
of these services in Section 1 may be established in writing from time
to time by agreement between the Fund and the Transfer Agent. The
Transfer Agent may at times perform only a portion of these services and
the Fund or its agent may perform these services on the Fund's behalf.
3
<PAGE>
(f) ADDITIONAL TELEPHONE SUPPORT SERVICES. If the parties elect to
have the Transfer Agent provide ADDITIONAL telephone support services
under this Agreement, the parties will agree to such services, fees and
sub-contracting as stated in Schedule 1.2(f) entitled "Telephone Support
Services" attached hereto.
2. THIRD PARTY ADMINISTRATORS FOR DEFINED CONTRIBUTION PLANS
2.1 The Fund may decide to make available to certain of its customers, a
qualified plan program (the "Program") pursuant to which the customers
("Employers") may adopt certain plans of deferred compensation ("Plan or
Plans") for the benefit of the individual Plan participant (the "Plan
Participant"), such Plan(s) being qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended ("Code") and administered by
third party administrators which may be plan administrators as defined
in the Employee Retirement Income Security Act of 1974, as amended)(the
"TPA(s)").
2.2 In accordance with the procedures established in the initial Schedule
2.1 entitled "Third Party Administrator Procedures", as may be amended
by the Transfer Agent and the Fund from time to time ("Schedule 2.1"),
the Transfer Agent shall:
(a) Treat Shareholder accounts established by the Plans in the name
of the Trustees, Plans or TPAs as the case may be as omnibus accounts;
(b) Maintain omnibus accounts on its records in the name of the TPA
or its designee as the Trustee for the benefit of the Plan; and
(c) Perform all services under SECTION 1 as transfer agent of the
Funds and not as a record-keeper for the Plans.
2.3 Transactions identified under SECTION 2 of this Agreement shall be
deemed exception services ("Exception Services") when such transactions:
(a) Require the Transfer Agent to use methods and procedures other
than those usually employed by the Transfer Agent to perform services
under SECTION 1 of this Agreement;
(b) Involve the provision of information to the Transfer Agent after
the commencement of the nightly processing cycle of the TA2000 System;
or
(c) Require more manual intervention by the Transfer Agent, either in
the entry of data or in the modification or amendment of reports
generated by the TA2000 System than is usually required by
non-retirement plan and pre-nightly transactions.
4
<PAGE>
3. FEES AND EXPENSES
3.1 FEE SCHEDULE. For the performance by the Transfer Agent pursuant to
this Agreement, the Fund agrees to pay the Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in the
attached fee schedule ("Schedule 3.1"). Such fees and out-of-pocket
expenses and advances identified under SECTION 3.2 below may be changed
from time to time subject to mutual written agreement between the Fund
and the Transfer Agent.
3.2 OUT-OF-POCKET EXPENSES. In addition to the fee paid under SECTION 3.1
above, the Fund agrees to reimburse the Transfer Agent for out-of-pocket
expenses, including but not limited to confirmation production, postage,
forms, telephone, microfilm, microfiche, mailing and tabulating proxies,
records storage, or advances incurred by the Transfer Agent for the
items set out in Schedule 3.1 attached hereto. In addition, any other
expenses incurred by the Transfer Agent at the request or with the
consent of the Fund, will be reimbursed by the Fund.
3.3 POSTAGE. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all shareholder accounts shall be advanced to the
Transfer Agent by the Fund at least seven (7) days prior to the mailing
date of such materials.
3.4 INVOICES. The Fund agrees to pay all fees and reimbursable expenses
within thirty (30) days following the receipt of the respective billing
notice, except for any fees or expenses which are subject to good faith
dispute. In the event of such a dispute, the Fund may only withhold
that portion of the fee or expense subject to the good faith dispute.
The Fund shall notify the Transfer Agent in writing within twenty-one
(21) calendar days following the receipt of each billing notice if the
Fund is disputing any amounts in good faith. If the Fund does not
provide such notice of dispute within the required time, the billing
notice will be deemed accepted by the Fund.
4. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
4.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
4.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
4.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
4.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
5
<PAGE>
4.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
5.1 It is a business trust duly organized and existing and in good standing
under the laws of the State of Delaware.
5.2 It is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement.
5.3 All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
5.4 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
5.5 A registration statement under the Securities Act of 1933, as amended is
currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with
respect to all Shares of the Fund being offered for sale.
6. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM COMMERCIAL
CODE
6.1 The Transfer Agent is authorized to promptly debit the appropriate Fund
account(s) upon the receipt of a payment order in compliance with the
selected security procedure (the "Security Procedure") chosen for funds
transfer and in the amount of money that the Transfer Agent has been
instructed to transfer. The Transfer Agent shall execute payment orders
in compliance with the Security Procedure and with the Fund instructions
on the execution date provided that such payment order is received by
the customary deadline for processing such a request, unless the payment
order specifies a later time. All payment orders and communications
received after this the customary deadline will be deemed to have been
received the next business day.
6.2 The Fund acknowledges that the Security Procedure it has designated on
the Fund Selection Form was selected by the Fund from security
procedures offered by the Transfer Agent. The Fund shall restrict
access to confidential information relating to the Security Procedure to
authorized persons as communicated to the Transfer Agent in writing.
The Fund must notify the Transfer Agent immediately if it has reason to
believe
6
<PAGE>
unauthorized persons may have obtained access to such information or of
any change in the Fund's authorized personnel. The Transfer Agent shall
verify the authenticity of all Fund instructions according to the
Security Procedure.
6.3 The Transfer Agent shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the
account number, the account number shall take precedence and govern.
6.4 The Transfer Agent reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of the Transfer Agent's
receipt of such payment order; (b) if initiating such payment order
would cause the Transfer Agent, in the Transfer Agent's sole judgement,
to exceed any volume, aggregate dollar, network, time, credit or similar
limits which are applicable to the Transfer Agent; or (c) if the
Transfer Agent, in good faith, is unable to satisfy itself that the
transaction has been properly authorized.
6.5 The Transfer Agent shall use reasonable efforts to act on all authorized
requests to cancel or amend payment orders received in compliance with
the Security Procedure provided that such requests are received in a
timely manner affording the Transfer Agent reasonable opportunity to
act. However, the Transfer Agent assumes no liability if the request
for amendment or cancellation cannot be satisfied.
6.6 The Transfer Agent shall assume no responsibility for failure to detect
any erroneous payment order provided that the Transfer Agent complies
with the payment order instructions as received and the Transfer Agent
complies with the Security Procedure. The Security Procedure is
established for the purpose of authenticating payment orders only and
not for the detection of errors in payment orders.
6.7 The Transfer Agent shall assume no responsibility for lost interest with
respect to the refundable amount of any unauthorized payment order,
unless the Transfer Agent is notified of the unauthorized payment order
within thirty (30) days of notification by the Transfer Agent of the
acceptance of such payment order. In no event (including failure to
execute a payment order) shall the Transfer Agent be liable for special,
indirect or consequential damages, even if advised of the possibility of
such damages.
6.8 When the Fund initiates or receives Automated Clearing House credit and
debit entries pursuant to these guidelines and the rules of the National
Automated Clearing House Association and the New England Clearing House
Association, the Transfer Agent will act as an Originating Depository
Financial Institution and/or receiving depository Financial Institution,
as the case may be, with respect to such entries. Credits given by the
Transfer Agent with respect to an ACH credit entry are provisional until
the Transfer Agent receives final settlement for such entry from the
Federal Reserve Bank. If the Transfer Agent does not receive such final
settlement, the Fund agrees that the Transfer
7
<PAGE>
Agent shall receive a refund of the amount credited to the Fund in
connection with such entry, and the party making payment to the Fund via
such entry shall not be deemed to have paid the amount of the entry.
6.9 Confirmation of Transfer Agent's execution of payment orders shall
ordinarily be provided within twenty four (24) hours notice of which may
be delivered through the Transfer Agent's proprietary information
systems, or by facsimile or call-back. Fund must report any objections
to the execution of an order within thirty (30) days.
7. DATA ACCESS AND PROPRIETARY INFORMATION
7.1 The Fund acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Transfer Agent as
part of the Fund's ability to access certain Fund-related data
("Customer Data") maintained by the Transfer Agent on data bases under
the control and ownership of the Transfer Agent or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of
substantial value to the Transfer Agent or other third party. In no
event shall Proprietary Information be deemed Customer Data. The Fund
agrees to treat all Proprietary Information as proprietary to the
Transfer Agent and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as may be
provided hereunder. Without limiting the foregoing, the Fund agrees for
itself and its employees and agents to:
(a) Use such programs and databases (i) solely on the Fund's
computers, or (ii) solely from equipment at the location agreed to
between the Fund and the Transfer Agent and (iii) solely in accordance
with the Transfer Agent's applicable user documentation;
(b) Refrain from copying or duplicating in any way (other than in the
normal course or performing processing on the Fund's computer(s)), the
Proprietary Information;
(c) Refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform in a timely manner of such fact and dispose of such
information in accordance with the Transfer Agent's instructions;
(d) Refrain from causing or allowing information transmitted from the
Transfer Agent's computer to the Fund's terminal to be retransmitted to
any other computer terminal or other device except as expressly
permitted by the Transfer Agent (such permission not to be unreasonably
withheld);
(e) Allow the Fund to have access only to those authorized
transactions as agreed to between the Fund and the Transfer Agent; and
8
<PAGE>
(f) Honor all reasonable written requests made by the Transfer Agent
to protect at the Transfer Agent's expense the rights of the Transfer
Agent in Proprietary Information at common law, under federal copyright
law and under other federal or state law.
7.2 Proprietary Information shall not include all or any portion of any of
the foregoing items that: (i) are or become publicly available without
breach of this Agreement; (ii) are released for general disclosure by a
written release by the Transfer Agent; or (iii) are already in the
possession of the receiving party at the time or receipt without
obligation of confidentiality or breach of this Agreement.
7.3 The Fund acknowledges that its obligation to protect the Transfer
Agent's Proprietary Information is essential to the business interest of
the Transfer Agent and that the disclosure of such Proprietary
Information in breach of this Agreement would cause the Transfer Agent
immediate, substantial and irreparable harm, the value of which would be
extremely difficult to determine. Accordingly, the parties agree that,
in addition to any other remedies that may be available in law, equity,
or otherwise for the disclosure or use of the Proprietary Information in
breach of this Agreement, the Transfer Agent shall be entitled to seek
and obtain a temporary restraining order, injunctive relief, or other
equitable relief against the continuance of such breach.
7.4 If the Fund notifies the Transfer Agent that any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, the Transfer Agent shall
endeavor in a timely manner to correct such failure. Organizations from
which the Transfer Agent may obtain certain data included in the Data
Access Services are solely responsible for the contents of such data and
the Fund agrees to make no claim against the Transfer Agent arising out
of the contents of such third-party data, including, but not limited to,
the accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS
AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON
AN AS IS, AS AVAILABLE BASIS. THE TRANSFER AGENT EXPRESSLY DISCLAIMS
ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
7.5 If the transactions available to the Fund include the ability to
originate electronic instructions to the Transfer Agent in order to: (i)
effect the transfer or movement of cash or Shares; or (ii) transmit
Shareholder information or other information, then in such event the
Transfer Agent shall be entitled to rely on the validity and
authenticity of such instruction without undertaking any further inquiry
as long as such instruction is undertaken in conformity with security
procedures established by the Transfer Agent from time to time.
9
<PAGE>
7.6 Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this SECTION 7. The obligations of this
Section shall survive any earlier termination of this Agreement.
8. INDEMNIFICATION
8.1 The Transfer Agent shall not be responsible for, and the Fund shall
indemnify and hold the Transfer Agent harmless from and against, any and
all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to:
(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or willful
misconduct;
(b) The Fund's lack of good faith, negligence or willful misconduct;
(c) The reliance upon, and any subsequent use of or action taken or
omitted, by the Transfer Agent, or its agents or subcontractors on: (i)
any information, records, documents, data, stock certificates or
services, which are received by the Transfer Agent or its agents or
subcontractors by machine readable input, facsimile, CRT data entry,
electronic instructions or other similar means authorized by the Fund,
and which have been prepared, maintained or performed by the Fund or any
other person or firm on behalf of the Fund including but not limited to
any previous transfer agent or registrar; (ii) any instructions or
requests of the Fund or any of its officers; (iii) any instructions or
opinions of legal counsel with respect to any matter arising in
connection with the services to be performed by the Transfer Agent under
this Agreement which are provided to the Transfer Agent after
consultation with such legal counsel; or (iv) any paper or document,
reasonably believed to be genuine, authentic, or signed by the proper
person or persons;
(d) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring that such Shares be registered
or in violation of any stop order or other determination or ruling by
any federal or any state agency with respect to the offer or sale of
such Shares;
(e) The negotiation and processing of any checks including without
limitation for deposit into the Fund's demand deposit account maintained
by the Transfer Agent; or
(f) Upon the Fund's request entering into any agreements required by
the National Securities Clearing Corporation (the "NSCC") by the NSCC
for the transmission of Fund or Shareholder data through the NSCC
clearing systems.
8.2 In order that the indemnification provisions contained in this SECTION 8
shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Transfer
<PAGE>
Agent, the Transfer Agent shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all
developments concerning such claim. The Fund shall have the option to
participate with the Transfer Agent in the defense of such claim or to
defend against said claim in its own name or in the name of the Transfer
Agent. The Transfer Agent shall in no case confess any claim or make
any compromise in any case in which the Fund may be required to
indemnify the Transfer Agent except with the Fund's prior written
consent.
9. STANDARD OF CARE
9.1 The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of
all services performed under this Agreement, but assumes no
responsibility and shall not be liable for loss or damage due to errors
unless said errors are caused by its negligence, bad faith, or willful
misconduct or that of its employees, except as provided in SECTION 9.2
below.
9.2 In the case of Exception Services as defined in SECTION 2.3 herein, the
Transfer Agent shall be held to a standard of gross negligence and
encoding and payment processing errors shall not be deemed negligence.
10. YEAR 2000
The Transfer Agent will take reasonable steps to ensure that its
products (and those of its third-party suppliers) reflect the available
technology to offer products that are Year 2000 ready, including, but
not limited to, century recognition of dates, calculations that
correctly compute same century and multi-century formulas and date
values, and interface values that reflect the date issues arising
between now and the next one-hundred years, and if any changes are
required, the Transfer Agent will make the changes to its products at a
price to be agreed upon by the parties and in a commercially reasonable
time frame and will require third-party suppliers to do likewise.
11. CONFIDENTIALITY
11.1 The Transfer Agent and the Fund agree that they will not, at any time
during the term of this Agreement or after its termination, reveal,
divulge, or make known to any person, firm, corporation or other
business organization, any customers' lists, trade secrets, cost figures
and projections, profit figures and projections, or any other secret or
confidential information whatsoever, whether of the Transfer Agent or of
the Fund, used or gained by the Transfer Agent or the Fund during
performance under this Agreement. The Fund and the Transfer Agent
further covenant and agree to retain all such knowledge and information
acquired during and after the term of this Agreement respecting such
lists, trade secrets, or any secret or confidential information
whatsoever in trust for the sole benefit of the Transfer Agent or the
Fund and their successors and assigns. In the event of breach of the
foregoing by either party, the remedies provided by SECTION 7.3 shall be
10
<PAGE>
available to the party whose confidential information is disclosed. The
above prohibition of disclosure shall not apply to the extent that the
Transfer Agent must disclose such data to its sub-contractor or Fund
agent for purposes of providing services under this Agreement.
11.2 In the event that any requests or demands are made for the inspection of
the Shareholder records of the Fund, other than request for records of
Shareholders pursuant to standard subpoenas from state or federal
government authorities (i.e., divorce and criminal actions), the
Transfer Agent will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such
inspection. The Transfer Agent expressly reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised
by counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person or if required by law or court order.
12. COVENANTS OF THE FUND AND THE TRANSFER AGENT
12.1 The Fund shall promptly furnish to the Transfer Agent the following:
(a) A certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the
execution and delivery of this Agreement; and
(b) A copy of the Declaration of Trust and By-Laws of the Fund and
all amendments thereto.
12.2 The Transfer Agent hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund for safekeeping of
stock certificates, check forms and facsimile signature imprinting
devices, if any; and for the preparation or use, and for keeping account
of, such certificates, forms and devices.
12.3 The Transfer Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable.
To the extent required by Section 31 of the Investment Company Act of
1940, as amended, and the Rules thereunder, the Transfer Agent agrees
that all such records prepared or maintained by the Transfer Agent
relating to the services to be performed by the Transfer Agent hereunder
are the property of the Fund and will be preserved, maintained and made
available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
12
<PAGE>
13. TERMINATION OF AGREEMENT
13.1 This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other.
13.2 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Fund. Additionally, the Transfer Agent reserves the right
to charge for any other reasonable expenses associated with such
termination and a charge equivalent to the average of three (3) months'
fees. Payment of such expenses or costs shall be in accordance with
SECTION 3.4 of this Agreement.
13.3 Upon termination of this Agreement, each party shall return to the other
party all copies of confidential or proprietary materials or information
received from such other party hereunder, other than materials or
information required to be retained by such party under applicable laws
or regulations.
14. ASSIGNMENT AND THIRD PARTY BENEFICIARIES.
14.1 Except as provided in SECTION 15.1 below and the Additional Telephone
Support Services Schedule 1.2(f) attached, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party. Any attempt to do so in
violation of this Section shall be void. Unless specifically stated to
the contrary in any written consent to an assignment, no assignment will
release or discharge the assignor from any duty or responsibility under
this Agreement.
14.2 Except as explicitly stated elsewhere in this Agreement, nothing under
this Agreement shall be construed to give any rights or benefits in this
Agreement to anyone other than the Transfer Agent and the Fund, and the
duties and responsibilities undertaken pursuant to this Agreement shall
be for the sole and exclusive benefit of the Transfer Agent and the
Fund. This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
14.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Transfer Agent and the Fund. Other than as
provided in SECTION 15.1 and Schedule 1.2(f), neither party shall make
any commitments with third parties that are binding on the other party
without the other party's prior written consent.
15. SUBCONTRACTORS
15.1 The Transfer Agent may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended, (ii) a BFDS subsidiary
13
<PAGE>
duly registered as a transfer agent or (iii) a BFDS affiliate duly
registered as a transfer agent; provided, however, that the Transfer
Agent shall be fully responsible to the Fund for the acts and omissions
of BFDS or its subsidiary or affiliate as it is for its own acts and
omissions.
15.2 Nothing herein shall impose any duty upon the Transfer Agent in
connection with or make the Transfer Agent liable for the actions or
omissions to act of unaffiliated third parties such as by way of example
and not limitation, Airborne Services, Federal Express, United Parcel
Service, the U.S. Mails, the NSCC and telecommunication companies,
provided, if the Transfer Agent selected such company, the Transfer
Agent shall have exercised due care in selecting the same.
16. MISCELLANEOUS
16.1 AMENDMENT. This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a
resolution of the Board of Trustees of the Fund.
16.2 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of
The Commonwealth of Massachusetts.
16.3 FORCE MAJEURE. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably beyond
its control, or other causes reasonably beyond its control, such party
shall not be liable for damages to the other for any damages resulting
from such failure to perform or otherwise from such causes.
16.4 CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be liable
to the other party for consequential damages under any provision of this
Agreement or for any consequential damages arising out of any act or
failure to act hereunder.
16.5 SURVIVAL. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or protections of
proprietary rights and trade secrets shall survive the termination of
this Agreement.
16.6 SEVERABILITY. If any provision or provisions of this Agreement shall be
held invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
16.7 PRIORITIES CLAUSE. In the event of any conflict, discrepancy or
ambiguity between the terms and conditions contained in this Agreement
and any Schedules or attachments hereto, the terms and conditions
contained in this Agreement shall take precedence.
14
<PAGE>
16.8 WAIVER. No waiver by either party or any breach or default of any of
the covenants or conditions herein contained and performed by the other
party shall be construed as a waiver of any succeeding breach of the
same or of any other covenant or condition.
16.9 MERGER OF AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.
16.10 COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
16.11. REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, exhibits,
attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether
or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and
that any enlargement, facsimile or further reproduction shall likewise
be admissible in evidence.
16.12 NOTICES. All notices and other communications as required or permitted
hereunder shall be in writing and sent by first class mail, postage
prepaid, addressed as follows or to such other address or addresses of
which the respective party shall have notified the other.
(a) If to State Street Bank and Trust Company, to:
State Street Bank and Trust Company
c/o Boston Financial Data Services, Inc.
Two Heritage Drive
Quincy, Massachusetts 02171
Attention: Legal Department
Facsimile: (617) 774-2287
(b) If to the Fund, to:
Attention:
15
<PAGE>
17. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares in
addition to the attached Schedule A with respect to which it desires to
have the Transfer Agent render services as transfer agent under the
terms hereof, it shall so notify the Transfer Agent in writing, and if
the Transfer Agent agrees in writing to provide such services, such
series of Shares shall become a Portfolio hereunder.
18. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or Shareholders
individually but are binding only upon the assets and property of the
Fund.
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
RWB FUND - INVESTMENT TRUST
BY:
---------------------------------
ATTEST:
- ----------------------
STATE STREET BANK AND TRUST COMPANY
BY:
----------------------------------
Executive Vice President
ATTEST:
17
<PAGE>
SCHEDULE A
RWB U.S. Bond Fund
RWB U.S. Total Market Fund
RWB U.S. High Book To Market Fund
RWB U.S. Small Companies Fund
RWB International High Book To Market Fund
RWB International Small Company Fund
RWB FUND - INVESTMENT TRUST STATE STREET BANK AND TRUST COMPANY
BY: BY:
---------------------------- --------------------------------
<PAGE>
SCHEDULE 1.2(f)
ADDITIONAL TELEPHONE SUPPORT FEES AND SERVICES
Dated ____________
I. SERVICES
1. Transfer Agent and Telephone Support Functions
a. Answer telephone inquiries from [XXX 8 a.m. to 8 p.m. Boston time
Monday through Friday XXX] from [XXX existing customers and
prospective customers XXX] of the Fund [XXX for sales literature
XXX] in accordance with the telephone script provided by the
Fund.
b. Answer questions pertaining thereto the extent that such
questions are answerable based upon the information supplied to
the Transfer Agent by the Fund.
c. [XXX As the Fund and the Transfer Agent may agree in writing, the
Transfer Agent will receive calls and take written transaction
requests from shareholders of the Fund. Transfer Agent
transactions include: [XXX telephone redemptions, account
maintenance, exchanges, transfers, confirmed purchases, account
balances and general inquiries XXX]. Some transactions may result
in research which will be done by the Fund. Other calls may be
referred directly to the Fund. Fax any referrals to [XXX name of
company XXX] on the same day the telephone call is received.XXX];
2 Incorporate new information into the above referenced script upon
written instructions from the Fund;
3. Maintain prospect detail information for six (6) months
thereafter, provide such information to the Fund in the form that
the Fund may reasonably request;
4. Send all literature orders for information from BFDS/DST [XXX
[how?] [to whom?] XXX] a minimum of [XXX one XXX] transmission
per day;
5. Provide the Fund with a [XXX daily/weekly/monthly XXX] telephone
report detailing the calls received during the [XXX
day/week/month XXX];
6. [XXX Provide the Fund with monthly conversion reports as selected
by the Fund from DST's standard report package. XXX]
<PAGE>
II. SUBCONTRACTORS
1. The Transfer Agent may, without further consent on the part of the
Fund, subcontract ministerial telephone support services for the
performance hereof.
III. FEES
RWB FUND - INVESTMENT TRUST STATE STREET BANK AND TRUST COMPANY
BY: BY:
------------------------------- ---------------------------------
<PAGE>
SCHEDULE 2.1
THIRD PARTY ADMINISTRATOR(S) PROCEDURES
Dated ____________
1. On each Business Day, the TPA(s) shall receive, on behalf of and as
agent of the Fund(s), Instructions (as hereinafter defined) from the
Plan. Instructions shall mean as to each Fund (i) orders by the Plan
for the purchases of Shares, and (ii) requests by the Plan for the
redemption of Shares; in each case based on the Plan's receipt of
purchase orders and redemption requests by Participants in proper form
by the time required by the term of the Plan, but not later than the
time of day at which the net asset value of a Fund is calculated, as
described from time to time in that Fund's prospectus. Each Business
Day on which the TPA receives Instructions shall be a "Trade Date".
2. The TPA(s) shall communicate the TPA(s)'s acceptance of such
Instructions, to the applicable Plan.
3. On the next succeeding Business Day following the Trade Date on which
it accepted Instructions for the purchase and redemption of Shares,
(TD+1), the TPA(s) shall notify the Transfer Agent of the net amount of
such purchases or redemptions, as the case may be, for each of the
Plans. In the case of net purchases by any Plan, the TPA(s) shall
instruct the Trustees of such Plan to transmit the aggregate purchase
price for Shares by wire transfer to the Transfer Agent on (TD+1). In
the case of net redemptions by any Plan, the TPA(s) shall instruct the
Fund's custodian to transmit the aggregate redemption proceeds for
Shares by wire transfer to the Trustees of such Plan on (TD+1). The
times at which such notification and transmission shall occur on (TD+1)
shall be as mutually agreed upon by each Fund, the TPA(s), and the
Transfer Agent.
4. The TPA(s) shall maintain separate records for each Plan, which record
shall reflect Shares purchased and redeemed, including the date and
price for all transactions, and Share balances. The TPA(s) shall
maintain on behalf of each of the Plans a single master account with
the Transfer Agent and such account shall be in the name of that Plan,
the TPA(s), or the nominee of either thereof as the record owner of
Shares owned by such Plan.
5. The TPA(s) shall maintain records of all proceeds of redemptions of
Shares and all other distributions not reinvested in Shares.
6. The TPA(s) shall prepare, and transmit to each of the Plans, periodic
account statements showing the total number of Shares owned by that
Plan as of the statement closing date, purchases and redemptions of
Shares by the Plan during the period covered by the statement, and the
dividends and other distributions paid to the Plan on Shares during the
statement period (whether paid in cash or reinvested in Shares).
<PAGE>
7. The TPA(s) shall, at the request and expense of each Fund, transmit to
the Plans prospectuses, proxy materials, reports, and other information
provided by each Fund for delivery to its shareholders.
8. The TPA(s) shall, at the request of each Fund, prepare and transmit to
each Fund or any agent designated by it such periodic reports covering
Shares of each Plan as each Fund shall reasonably conclude are
necessary to enable the Fund to comply with state Blue Sky
requirements.
9. The TPA(s) shall transmit to the Plans confirmation of purchase orders
and redemption requests placed by the Plans; and
10. The TPA(s) shall, with respect to Shares, maintain account balance
information for the Plan(s) and daily and monthly purchase summaries
expressed in Shares and dollar amounts.
11. Plan sponsors may request, or the law may require, that prospectuses,
proxy materials, periodic reports and other materials relating to each
Fund be furnished to Participants in which event the Transfer Agent or
each Fund shall mail or cause to be mailed such materials to
Participants. With respect to any such mailing, the TPA(s) shall, at
the request of the Transfer Agent or each Fund, provide at the TPA(s)'s
expense complete and accurate set of mailing labels with the name and
address of each Participant having an interest through the Plans in
Shares.
RWB FUND - INVESTMENT TRUST STATE STREET BANK AND TRUST COMPANY
BY: BY:
---------------------------------- ----------------------------------
<PAGE>
SCHEDULE 3.1
FEES
Dated ____________
RWB FUND - INVESTMENT TRUST STATE STREET BANK AND TRUST AND COMPANY
BY: BY:
--------------------------------- ------------------------------------
<PAGE>
Exhibit 23(h)(iii)
SA FUNDS - INVESTMENT TRUST
SHAREHOLDER SERVICE AGREEMENT
AGREEMENT made this ___ day of ______ 1999, by and between SA FUNDS -
INVESTMENT TRUST, a Delaware business trust (the "Trust"), and RWB ADVISORY
SERVICES INC. ("RWB"), a Maryland corporation.
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act")for the purpose of investing and reinvesting its assets in
securities, as set forth in its Registration Statement under the 1940 Act and
the Securities Act of 1933, as such Registration Statement may from time to time
be amended and supplemented; and
WHEREAS, the Trust desires to retain RWB to furnish certain shareholder
services to the Trust, and RWB is willing to furnish such services, on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF RWB. The Trust hereby appoints RWB to serve as
shareholder service agent to the Trust, subject to the direction of the Board of
Trustees and the officers of the Trust for the period and on the terms
hereinafter set forth. RWB hereby accepts such appointment and agrees to
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services described herein for the
compensation as provided in Section 3 of this Agreement.
The Trust will initially consist of the series and/or class(es) of
shares (each a "Fund") listed in Schedule A to this Agreement. In the event that
the Trust establishes one or more additional Funds with respect to which the
Trust wishes to retain RWB to act as service agent hereunder, the Trust shall
notify RWB in writing. Upon written acceptance by RWB, such Fund shall become
subject to the provisions of this Agreement to the same extent as the existing
Funds, except to the extent that such provisions (including those relating to
the compensation payable by the Trust and its Funds) may be modified with
respect to each additional Fund in writing by the Trust and RWB at the time of
the addition of the Fund.
2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following
services to each Fund:
A. Establish and maintain a toll-free telephone number for
shareholders of the Fund to use to obtain or receive up-to-date
account information;
B. Provide to shareholders of the Fund quarterly reports with
respect to the performance of the Fund, such reports to be
separate and apart from the Trust's semi-annual and annual
reports to shareholders; and
<PAGE>
C. Provide the shareholders of the Fund with such information
regarding the operation and affairs of the Fund, and their
investment in its shares, as they or the Trust may reasonably
request.
3. COMPENSATION OF RWB. For the services to be rendered by RWB as
provided in Section 2 of this Agreement, each Fund shall pay to RWB, at the end
of each month, a fee equal to one-twelfth of 0.25 percent of average daily net
assets of the Class S Shares of the Fund and one-twelfth of 0.05 percent of
average daily net assets of the Class I Shares of the Fund. If this Agreement is
terminated prior to the end of any month, the fee for such month shall be
prorated.
4. ACTIVITIES OF RWB. The services of RWB to the Trust or in respect of
a Fund are not to be deemed exclusive, and RWB shall be free to render similar
services to others as long as its services to the Trust or in respect of a Fund
are not impaired thereby.
5. RESPONSIBILITY OF RWB. In the performance of its duties hereunder,
RWB shall be obligated to exercise due care and diligence and to act in a timely
manner and in good faith to assure the accuracy and completeness of all services
performed under this Agreement. RWB shall be under no duty to take any action on
behalf of a Fund except as specifically set forth herein or as may be
specifically agreed to by RWB in writing. RWB shall be responsible for its own
negligent failure to perform its duties under this Agreement. In assessing
negligence for purposes of this Agreement, the parties agree that the standard
of care applied to RWB's conduct shall be the care that would be exercised by a
similarly situated service provider, supplying substantially the same services
under substantially similar circumstances.
No provision of this Agreement shall be deemed to protect RWB against
any liability to the Trust or its shareholders to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations under
this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective on
______, 1999, provided that prior to such date it shall have been approved by
the Board of Trustees of the Trust including a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust and shall
continue in effect until terminated by the Trust or RWB. This Agreement may at
any time be terminated without penalty by vote of the Board of Trustees of the
Trust on sixty days' written notice to RWB. This Agreement may be terminated by
RWB after ninety days' written notice to the Trust.
7. NOTICES. Any notices under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
<PAGE>
9. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
11. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the ____ day of _______, 1999.
RWB ADVISORY SERVICES INC. SA FUNDS - INVESTMENT TRUST
By: __________________________ By: ______________________________
John J. Bowen, Jr. John J. Bowen, Jr.
Title: President Title: President
<PAGE>
SCHEDULE A
SA FUNDS - INVESTMENT TRUST
SA Fixed Income Fund - Class S Shares
SA U.S. Market Fund - Class S Shares
SA U.S. HBtM Fund - Class S Shares
SA U.S. Small Fund - Class S Shares
SA International HBtM Fund - Class S Shares
SA International Small Fund Class S Shares
SA Fixed Income Fund - Class I Shares
SA U.S. Fund - Class I Shares
SA U.S. HBtM Fund - Class I Shares
SA U.S. Small Fund - Class I Shares
SA International HBtM Fund - Class I Shares
SA International Small Fund - Class I Shares
<PAGE>
SA Funds - Investment Trust
1. SHARE PURCHASE. RWB Advisory Services Inc. ("RWB") hereby purchases
from SA Funds - Investment Trust (the "Trust"), a series-type investment
company initially having six investment portfolios (the "Funds"), the
following shares of beneficial interest ("Shares") of the below named Funds
at the per-share purchase price indicated below, on the terms and conditions
set forth herein and in the registration statement described below:
<TABLE>
<CAPTION>
AMOUNT PRICE SHARES
FUNDS PURCHASED PER SHARE PURCHASED
- ----- --------- --------- ---------
<S> <C> <C> <C>
SA Fixed Income Fund $10
SA U.S. Market Fund $10
SA U.S. HBtM Fund $10
SA U.S. Small Fund $10
SA International HBtM Fund $10
SA International Small Fund $10
</TABLE>
RWB hereby acknowledges receipt of a purchase confirmation reflecting
the purchase of the Shares, and the Trust hereby acknowledges receipt from
RWB of funds in the amount of $100,000 in full payment of the Shares.
RWB understands that the Trust has filed with the Securities and
Exchange Commission a Registration Statement which contains the prospectus
describing the Trust and the Shares to be issued thereunder. By its
signature hereto, the undersigned hereby acknowledges receipt of a copy of
the Registration Statement.
2. REPRESENTATIONS AND WARRANTIES. RWB hereby represents and warrants to
the Trust as follows:
(a) It is aware that no federal or state agency has made any findings or
determinations as to the fairness for investment, nor any
recommendations or endorsement, of the Trust's shares;
(b) It has such knowledge and experience of financial and business matters
as will enable it to utilize the information made available to it in
connection with the offering described in the Trust's Registration
Statement, to evaluate the merits and risks of the prospective
investment and to make an informed investment decision;
(c) It recognizes that the Trust has only recently been organized and has
no financial or operating history and, further, that investment in the
Trust involves certain risks related to the purchase of the Trust's
shares, and it acknowledges that it has suitable financial resources
and anticipated income to bear the economic risk of such an
investment;
<PAGE>
(d) It is purchasing the Shares for its own account, for investment, in
order to provide initial capital or "seed money," for each of the
Funds and not with any intent to distribute or resell the Shares,
either in whole or in part, and with no present intent to sell or
otherwise dispose of the Shares, either in whole or in part;
(e) It will not sell the Shares purchased by it without registration of
such Shares under the Securities Act of 1933 except in reliance upon
an exemption therefrom;
(f) It has been furnished with, and has carefully read, this purchase
agreement and the Registration Statement and such material documents
relating to the Trust as its has requested and as have been provided
to it by the Trust; and
(g) It has had the opportunity to ask questions of, and receive answers
from, the Trust concerning each Fund and the terms of the offering.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
April _______, 1999.
RWB Advisory Services Inc.
By:________________________________
[name]
___________________________________
[title]
SA Funds - Investment Trust
By:________________________________
[name]
___________________________________
[title]
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee or officer, or both, of SA Funds - Investment
Trust (the "Trust"), a Delaware business trust, do hereby constitute and appoint
Cynthia Surprise to be my true, sufficient and lawful attorney, with full power
to sign for me, in my name and capacity as trustee or officer, or both, the
Registration Statement of the Trust on Form N-1A, and any and all amendments
thereto to be filed by the Trust under the Investment Company Act of 1940, as
amended, and under the Securities Act of 1933, as amended, with respect to the
offering of its shares of beneficial interest, and any and all other documents
and papers relating thereto; and said attorney shall have full power of
substitution; and such attorney shall have full power to do all such things in
my name and on behalf of me in the capacities indicated to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and thereunder, hereby ratifying and confirming my
signature as it may be signed by said attorney to any and all amendments to such
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 4th day of June,
1999.
/s/ John J. Bowen, Jr.
----------------------
John J. Bowen, Jr.
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee or officer, or both, of RWB Funds - Investment
Trust (the "Trust"), a Delaware business trust, do hereby constitute and appoint
Cynthia Surprise to be my true, sufficient and lawful attorney, with full power
to sign for me, in my name and capacity as trustee or officer, or both, the
Registration Statement of the Trust on Form N-1A, and any and all amendments
thereto to be filed by the Trust under the Investment Company Act of 1940, as
amended, and under the Securities Act of 1933, as amended, with respect to the
offering of its shares of beneficial interest, and any and all other documents
and papers relating thereto; and said attorney shall have full power of
substitution; and such attorney shall have full power to do all such things in
my name and on behalf of me in the capacities indicated to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and thereunder, hereby ratifying and confirming my
signature as it may be signed by said attorney to any and all amendments to such
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 13th day of April,
1999.
/s/ David G. Booth
------------------
David G. Booth
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee or officer, or both, of RWB Funds - Investment
Trust (the "Trust"), a Delaware business trust, do hereby constitute and appoint
Cynthia Surprise to be my true, sufficient and lawful attorney, with full power
to sign for me, in my name and capacity as trustee or officer, or both, the
Registration Statement of the Trust on Form N-1A, and any and all amendments
thereto to be filed by the Trust under the Investment Company Act of 1940, as
amended, and under the Securities Act of 1933, as amended, with respect to the
offering of its shares of beneficial interest, and any and all other documents
and papers relating thereto; and said attorney shall have full power of
substitution; and such attorney shall have full power to do all such things in
my name and on behalf of me in the capacities indicated to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and thereunder, hereby ratifying and confirming my
signature as it may be signed by said attorney to any and all amendments to such
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 13th day of April,
1999.
/s/ Bryan W. Brown
------------------
Bryan W. Brown
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee or officer, or both, of SA Funds - Investment
Trust (the "Trust"), a Delaware business trust, do hereby constitute and appoint
Cynthia Surprise to be my true, sufficient and lawful attorney, with full power
to sign for me, in my name and capacity as trustee or officer, or both, the
Registration Statement of the Trust on Form N-1A, and any and all amendments
thereto to be filed by the Trust under the Investment Company Act of 1940, as
amended, and under the Securities Act of 1933, as amended, with respect to the
offering of its shares of beneficial interest, and any and all other documents
and papers relating thereto; and said attorney shall have full power of
substitution; and such attorney shall have full power to do all such things in
my name and on behalf of me in the capacities indicated to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and thereunder, hereby ratifying and confirming my
signature as it may be signed by said attorney to any and all amendments to such
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 28th day of May,
1999.
/s/ Patrick Keating
-------------------
Patrick Keating
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee or officer, or both, of RWB Funds - Investment
Trust (the "Trust"), a Delaware business trust, do hereby constitute and appoint
Cynthia Surprise to be my true, sufficient and lawful attorney, with full power
to sign for me, in my name and capacity as trustee or officer, or both, the
Registration Statement of the Trust on Form N-1A, and any and all amendments
thereto to be filed by the Trust under the Investment Company Act of 1940, as
amended, and under the Securities Act of 1933, as amended, with respect to the
offering of its shares of beneficial interest, and any and all other documents
and papers relating thereto; and said attorney shall have full power of
substitution; and such attorney shall have full power to do all such things in
my name and on behalf of me in the capacities indicated to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and thereunder, hereby ratifying and confirming my
signature as it may be signed by said attorney to any and all amendments to such
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 13th day of April,
1999.
/s/ Harold M. Shefrin
---------------------
Harold M. Shefrin
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee or officer, or both, of SA Funds - Investment
Trust (the "Trust"), a Delaware business trust, do hereby constitute and appoint
Cynthia Surprise to be my true, sufficient and lawful attorney, with full power
to sign for me, in my name and capacity as trustee or officer, or both, the
Registration Statement of the Trust on Form N-1A, and any and all amendments
thereto to be filed by the Trust under the Investment Company Act of 1940, as
amended, and under the Securities Act of 1933, as amended, with respect to the
offering of its shares of beneficial interest, and any and all other documents
and papers relating thereto; and said attorney shall have full power of
substitution; and such attorney shall have full power to do all such things in
my name and on behalf of me in the capacities indicated to enable the Trust to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and thereunder, hereby ratifying and confirming my
signature as it may be signed by said attorney to any and all amendments to such
Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this 27th day of May,
1999.
/s/ Michael Clinton
-------------------
Michael Clinton
